This has been a painful year for most Canadians and their wallets. This pandemic has injured so many businesses and their family finances, that it is still uncertain how many will recover. But all is not lost. There is a way to do this without taking on more debt and risk you can’t afford.
So, what is the best way to manage holiday debt this holiday season?
The problem for many people is that the temptation to spend money they shouldn’t be spending this season will be high. Many will likely dismiss the risk of purchasing now versus paying later, and the emotional decision to purchase may land, even the most well intentioned person, deeper in debt.
And as you may already know, paying 16 to 28% interest on credit card debt is digging oneself further into a deeper hole.
So what are you to do if this is you?
It’s totally understandable that you want to give gifts this season. And so if this is your goal, we want you to be able to do this. Fortunately, there are fun and thoughtful ways to do it within your budget. These gifts will feel “mindful” and look VERY big.
Children don’t need the $200 Lego Set, or a new laptop. Children love the experience of unwrapping. What you could do is go to the fabric store and buy a $5.00 piece of christmas fabric and sew up a very large stocking with a simple needle and thread (no previous experience necessary).
Go to the dollar store to buy the needle and thread for $1.00. Then buy $20.00 of miscellaneous things including socks, crafts, candy and bubble bath and general fun stuff. Wrap up each individually. It will take your kids a longer time to unwrap everything, and they will have fun doing it. They will remember the time it took, the mystery of the big homemade stocking, and the discovery of guessing each item before they unwrapped them. The dollar store sells Christmas paper as well. It’s all about using some imagination to make it a fun “unwrapping” experience.
For older teens, put shampoo, shaving creams, hot chocolate, nail polish, etc…fun little things in their stockings. Add a $10.00 gift card to a coffee shop. Make them a homemade mask, their favorite banana bread, etc, and wrap it up. Teens get that money is sometimes tight, and they prefer the personal touch anyway vs the less genuine gifts. And top it off with a personal note.
Another fun project for your kids is to make them a time capsule. Add momentos, pictures, favorite toys, music, videos, phones, technology, etc…things they no longer use that they loved..etc with a handwritten letter from you. When they open that in 10-20 years they will be so very grateful for this fun family project.
Gifts for adult family members can be as easy as baking cookies, making a craft, buying a $3 frame at the dollar store and framing a favorite photograph. There is no need for expensive gifts when “mindful” gifts always score way higher in the hearts of family members.
Point is, invest in yourself and your kids before you give more money to the credit card company. And simply refuse to feel guilty about it.
If you absolutely have to spend, then give yourself a budget, here’s how:. Take the money out in cash or put it on a “pre-paid credit card”. When you shop in person or online, limit yourself to only using your pre-paid card. Leave your other ones in your wallet. Once the money is gone from your temporary credit card, that’s it, you’re done. You’ll of course have to use a little self discipline to resist dipping into your bank account again, or taking out other credit cards.
Truth be told, many families don’t have extra money right now. Our best advice to you is: it’s better to put any extra money you have to pay down your debt in lieu of spending on holiday gifts that put you further behind.
So during these holidays, spend wisely. Spend securely. Spend with the knowledge that you refuse to make your credit card company richer. Feel good that you are making good decisions for the financial well-being of your family.
Be creative and use your imagination.
With this advance knowledge on how to manage holiday debt in 2020, we would like to take this opportunity to express our very best wishes to you and yours this holiday season!
Stay safe and healthy everyone!
The Team at Sheriff Sole & Madej Inc.