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Read this to dodge big headaches in January





Holiday spending
How to keep the holiday spirit without being burdened by debt
Most people would agree that the best part of the holidays is quality time relaxing with family and friends.

Yet every year thousands of individuals end up in debt after the holidays, often spending more money in November and December than in any other month.

The lure of charming store displays, numerous parties, and the pressure to "give like Santa" often create a spending frenzy that is irresistible for even the most budget conscious individuals.
Separating the emotion around the holiday - more time with family, long-standing traditions, or the pressure to keep up the holiday spirit - from the realities of what you can afford is an important step to spending money responsibly.

Determine what it is about Christmas that makes keeping on budget difficult for you.

Acknowledging those personal limitations up front is critical as you take on the next steps of holiday budgeting!
What can you afford to spend?

Do you know how much you have to spend over the holidays?

Have you been saving?

If not, calculate how much money you have coming in for December, and how much has to go out.

Don't forget rent, gas, electricity, food, etc. and existing credit payments. The amount left is what you have available to spend on Christmas.
How did you do last year?

Were you in debt?

Figure out what you spent during last year's holiday season by reviewing old bank statements and credit card bills.

Can you spend the same amount this year without going into debt? Or is there spending that really isn't necessary to repeat this year?
Tips for controlling your spending:

•  Reviewing last year's expenses will remind you of your purchases. There's more to holiday spending than presents. Decorations, clothes, parties, travel, cards, shipping costs for presents, and phone calls all add to the cost of the holidays

•  Make a list of all the things you want to spend money on and prioritize. Maybe this year you'll have to cut out the items on the bottom of your list. If you typically attend several parties out of obligation, give yourself a break and decline to attend. Babysitters, taxis, parking, or holiday outfits can add up

•  Be creative. And that doesn't mean gifts have to be homemade

•  Suggest drawing names for family or workplace gift giving. Raise the issue now, to give people time to adjust their expectations

•  Suggest getting together and having a quality visit instead of exchanging gifts with old friends

•  Make a list and check it twice! Identify the people you are purchasing gifts for, and how much you want to spend on each. Then decide what you are going to buy each person. This will reduce the chance of an impulse purchase that puts you over-budget. And it is always tempting to indulge yourself over the holidays and buy a "me" gift. If you budget for it, other unnecessary treats won't tempt you.

Time to shop!

Having a set list with a budget for each item will make your shopping much easier, and more fun.

You can research by phoning or even surf the internet to compare shop and find the best deals.

Try to use cash rather than credit cards.

This will help you keep track of what you truly have available to spend.

If you are using credit cards, set aside money in your checking account every time you make a purchase.

This ensures you have the money available to pay your bill by the due date.

Buying gifts before you have earned the money to pay for them is borrowing from the future to pay for the present.

It is the exact opposite of saving or investing. With the high interest rates on many cards, you can quickly accumulate debt, causing you to fall further and further behind in your payments.
The best way to ensure you have enough money for all your Christmas purchases is to start planning for Christmas one year early!

This is a big expense and it should be planned for every year.

Take your time and figure out how much money you need to buy all your gifts decorations, etc. (for example $1,000).

Then divide that by 12 to get the amount you need to save monthly ($80).

Starting in January put that money into an envelope or savings account.

By next Christmas you will have all the money you need in cash.

Instead of worrying and stressing about finances, you can relax and enjoy the holidays.

Sure it is too late for this year, but it is a perfect New Year’s Resolution for next year – and one you will feel great about!
Remember, it's never too late to stop a spending spree!

If you slip up with one purchase, don't panic.

Get right back on the plan.

You'll enjoy the holiday much more if you're not dreading the bills in January.

Remember that creating and managing a budget plays a crucial part in your financial health and gives you the control you need to meet your financial goals.

Take control of your finances and debt.
For more information on managing your money, contact your local Credit Counselling Service of Sault Ste. Marie & District at 705-254-1424.