Monday, December 8, 2014
Avoiding Christmas spending hangover
Released by Jason Brown, Envision CU, Photo Tamara Hendsbee
he Monday in the last full week of January has been dubbed “Blue Monday” and singled out as a source of melancholy and stress due to the combination of post-holiday doldrums, increased credit card debt and lack of daylight. Whether it’s a real phenomenon or not, 2015’s upcoming so-called “most depressing day of the year” may continue to be just that for some Canadians.
Consumers are continuing to ramp up their non-housing related debt loads, according to a recent report from Equifax Canada. At the same time, they are increasing their holiday spending—a Deloitte Canada survey indicates that 65.7 per cent of Canadians are planning to spend the same or more money on gifts and decor compared to last year. This could spell trouble for some come the new year, particularly if interest rates begin to creep upward.
“Limiting the fallout to your finances and keeping your credit score intact is possible with just a little planning,” says Tamara Hendsbee, a branch manager with Envision Financial.
Hendsbee’s advice starts off with making a budget of how much you have to spend on each person on your list.
“If you don’t have a budget in place, you’ll buy whatever catches your eye without much regard to the cost,” says Hendsbee. “When the bills come in January, you might be caught off guard.” What’s more, Hendsbee suggests tracking all expenses monthly and reviewing those regularly.
“Holiday spending can put people in deep financial trouble,” she says. “It’s not uncommon for us to find that people’s expenses are more than they are taking in and they don’t even realize it.”
Consumers should start tracking what they spent month to month and they’ll soon become aware of where they can cut back, adds Hendsbee. Personal banking experts in the branch are also there to help.
“We’re here to help members figure out the best ways to manage their debt and spending—and our advice is free,” says Hendsbee.
Lastly, if you find yourself having spent too much, she says to pay off your highest interest credit cards first or consolidate your credit card debt on a line of credit—which often carry a 10 to 15 per cent lower interest rate then credit cards, meaning you’ll end up paying much less interest in the end.
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