With Halloween back in the graveyard the masters of marketing are setting their sites on the Christmas Holiday shopping season - and your wallet. Expect the drum beat to rise to dizzying heights by Black Friday – the unofficial start of the consumer frenzy that coincides with the Friday after U.S. Thanksgiving on Nov. 28.
That may come as a shock for consumers still burdened with last year’s holiday debt. A recent survey from credit rating agency TransUnion suggests that debt will only mount this year for many Canadians. It finds that 64.6 per cent of us don’t sock away money for holiday spending. Fewer than 15 per cent say they don’t start saving until October.
A recent Bank of Montreal study says the average Canadian spent $1,600 last year on gifts, travel and entertainment and that number is expected to grow this holiday season.
TransUnion says for a lot of consumers that kind of spending means using credit cards, opening new lines of credit or taking on extra debt. With the average Canadian owning over $27,000 in consumer debt (not including mortgages) TransUnion warns excessive inquiries for new lines of credit, higher balances and large amounts of debt can do a lot of damage to a consumer’s credit health. They have a few pieces of advice for consumers before they go shopping this year.
Make a list and check it twice
Santa Claus has never declared bankruptcy and that’s likely because he makes lists, not only for the naughty and nice, but to stay within budget. Before you head out to do your holiday shopping sit down and make a list of all the people you want to buy for, and how much you would like to spend on each. It may require trimming an amount or even a name here and there, but if you stick to that list you can avoid overspending.
Budget and save
Once you determine the total amount you want to spend on holiday gifts this year divide it by the number of paychecks you will receive between now and the holidays. As an example, if you plan to spend $600 this season and you will receive four paychecks between now and then, set aside $150 from each paycheck to spend on gifts.
Shop now, gift later
You may know someone who shops for Christmas throughout the year. Being eternally vigilant gives them the opportunity to scoop up bargains as they arise. It may be too late for that now, but keep an eye on local circulars and the Internet regularly for bargains as they pop up. The savings could go into your pocket or compensate for another gift on your list that is more expensive than originally thought.
Timing is everything when it comes to holiday bargains because retailers have to do a certain amount of guess work when it comes to stocking their shelves. Physical space is limited even for online retailers and if an overstocked item isn’t moving it is just taking up space for the hotter selling items. To free that space up quickly retailers will often slash prices to move overstocked items. Bargains could continue right up to the holiday’s and beyond but you take your chances when you wait for the last minute.
Save for yourself
Saving ahead for the holidays is a great way to reduce personal stress during a normally stressful time. Day-to-day life goes on through the holidays and that’s why it's important to save a portion of each paycheck for any unexpected financial emergency.
It’s also important to keep in mind the holidays are a time for family, friends and good cheer – and you can’t put a price on that.