For anyone who routinely waits until Dec. 20 to start holiday shopping, it's easy to hate someone like Marissa Anwar. The operations consultant from Waterloo, Ont., finished all her holiday shopping back in September – and she managed to stick to her budget, too.
In fact, until this year, it was typical for Ms. Anwar to shell out $1,500 to $1,800 on Christmas presents for her parents, siblings, friends and godson. But after taking a good, long look at her ballooning debt, she decided to put the brakes on her spending and create a structured plan to pay off the money she owes.
"This year I've spent about $950 on the holidays and I'm done!" she says. "I have a running list of everybody in my BlackBerry in terms of what I want to get them and what they like. I just pick stuff up during the year."
Other Canadians would do well to ditch their own, "give like Santa" ways and follow Ms. Anwar's lead. According to TransUnion's quarterly analysis of Canadian credit trends last year, the average consumer's total debt floated up to $25,960 in the fourth quarter, despite flat or negative growth the rest of the year. In other words, even if Canadians were paying off debt from January to September, all the hard work went up in smoke by New Year's Eve as people went on a pre-holiday buying binge.
But why? What is it about the holidays that turns otherwise rational shoppers into over-spenders who have a hard time saying "no" to $65 tins of peanut brittle?
"It's emotional gift-giving," says Patricia White, executive director of Credit Counselling Canada in Toronto. "They're purchasing with their hearts rather than with their heads."
Or at least that's part of the story. Ms. White says that shoppers are also easily influenced by advertising and even family traditions. For example, if the family has never put a spending cap on purchases for everyone, it can feel uncomfortable to be the lone person asking the adults to draw names for Secret Santa this year. Still, it's important to speak up, because chances are you're not the only one in a financial bind or who simply wants to spend less. That conversation could end up saving you hundreds.
Here are a few other ways to stay out of debt this season.
Know the sales cycles
Ms. Anwar says she shops for holiday gifts from January to September because that's when the best deals are. Take sports team paraphernalia. She knows her brother loves the Blue Jays, so the moment the season is over, she snatches up jerseys at 40-50 per cent off. The same goes for perfume. The summer months are the perfect time to sniff out a deal on your grandma's favourite scent. That's when retailers want to clear out old stock and make way for new products.
Think whole picture
Assume a budget is just for gift giving? Think again. Decorations, parties, travel, clothes, cards and stamps are all going to cost you. And don't forget tax. Your budget might be $1,000 this year, but are you including HST? It all adds up.
Leave credit cards at home
That's the best advice Ms. White says she has for staying on budget. Instead, use cash or debit because once that money is gone, it's gone.
You're not a shopping sherpa
So don't act like one. That is to say, just because your sister-in-law e-mails you a long wish list full of budget-busting items (a $200 skillet, anyone?) it doesn't mean you have to run to a crowded mall and buy from the list. Gift giving is supposed to be a reflection of your affection, not somebody else's shopping run.
Stay out of the store
There's something to be said for buying all your gifts online. Not only do you avoid parking hassles, once you go to check out, all your gifts are listed by price – and even added up so you can see exactly how much you're spending in total. Talk about a reality check. Just remember to use online coupons to enjoy more savings and even free shipping. Visit retailmenot.com for a selection of promo codes for big brands.
Make shopping a chore
"As a culture, we've come to think of shopping as a leisure activity. When it comes to the mall, I say, 'get in and get out,'" Ms. White says. So leave the spendaholic best friend at home, shop alone, work from a list, and go when it's more quiet and less stressful. Make shopping an errand, not entertainment, and come January you'll be saving for your summer vacation, not wondering how to pay off a massive credit card bill.
How to track a holiday budget
– Decide how much money you plan to spend and write down the total in a small book. (Or use the notebook app on your phone.)
– Every time you buy a gift or other holiday purchase, subtract that amount from the balance.
– Watch the balance dwindle. Once it hits zero, your spending is done.