The malls are already decked, and the holiday spirit is all around, with Canadians feeling jollier and in a gift-giving mood compared to last year. The median budget is about $477, while those whose income is over $150,000 are ready to spend $816 on average (CBC News Canada). A recent survey by Ipsos Reid is even more optimistic when it comes to gift giving. Despite the shaky economy, some 80 percent of Canadians or 8 in 10 are going to spend $640 on average, which is up from $640 for last year (Ipsos). Still, it seems like a reasonable holiday budget.
Personal finance experts remind that while the amount may seem low, gifts are not the only thing to spend money on during the holidays. It is important to come up with a budget, notes RBC’s regional vice-president Glenn Sinden. There are other things on the shopping list to budget for, including travel, drinks, food, and more (The Globe and Mail). According to a TD Canada Trust Poll, when all holiday expenses are factored in, shoppers are going to spend close to $1,100 on entertainment, gifts, and food this holiday season. While 28 percent or over a quarter of respondents plan to spend about $500 or less, 22 percent of Canadians expect to spend at least $2,000.
Whatever the budget is, it is important to stay within the planned amount, and this is easier to achieve by getting organized and planning ahead. You have your shopping list and double checked it, but festive décor and lights may make you go overboard. One way to track your spending and avoid holiday credit card debt is to use one credit card for all purchases, explains TD Credit Cards’ Associate Vice President Pam Paddon. So, bring cash and only one credit card, leaving the rest at home (you should do this all the time, not only during the holidays). This will make it harder to charge too many items as you will have only one card.
It is a good idea to check your card account on a regular basis so that you stay within your budget. This also reminds you to pay your credit card balance in full and on time (CNW Canada Newswire). Of course, it is important to use your credit card responsibly because your credit score may drop due to high balances. Spending over one-third of your credit limit is likely to affect your credit score, on top of accumulating credit card debt.
When you do your holiday shopping, it is important to stick to your shopping list. Ignore big sales. In most cases, they are just masked as sales. Those ‘By two, get one free’ ads trick shoppers into going overboard. In fact, it is better to shop around online first. This is one way to stop yourself from buying on impulse. You can look online to decide what gifts to buy and then head to the mall. Finally, if you are to stick to a budget, do not shop for yourself. You may end up spending tons of money if you go shopping with the ‘one for you, one for me’ mindset (About.com).
Comments on this entry are closed.