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How to recover from that holiday spending hangover

<i>[The holidays are over, and the bills are starting to roll in. How do you deal with all that added financial stress?]</i>
[The holidays are over, and the bills are starting to roll in. How do you deal with all that added financial stress?]

Does more naughty than nice describe your spending habits this Christmas? Did you dip too deep into the piggy bank? Are you afraid to face your lavish ways when the credit card bills arrive?

Sounds like you might have a case of the post-holiday binge blues. Christmas certainly is the time for giving but if money falls through your fingers at every turn then you may now be regretting your seasonal splurge.

For starters, know that you’re not alone. Canadians might be a conservative lot, but we’re pretty generous according to CPA Canada, whose pre-Christmas poll showed that the average Canadian expected to spend nearly $900 on gifts in 2016.


Prepare for emergencies

If you’re aiming to reform your spending in 2017, the first thing you need to do is build a buffer of easily accessible, emergency money, says Kelley Keehn, an Edmonton-based personal finance educator and author of nine books on the subject. The buffer should be enough to carry your expenses for three to six months should you suddenly lose your job or run into a health issue that prevents you from working.

“Consider it like a short-term detox,” says Keehn. “But essentially there are two ways to get a buffer: you either reduce expenses or bring in more. Figure out what your family is spending and trim the fat. Start taking your lunch to work and making coffee at home. Or can you sell something on Kijiji or drive for Uber? Get creative.”

Save now for next Christmas

The next tactic you should take is to figure out how much you spend during the holidays and begin saving now for next Christmas. According to Keehn, Canadians spend $1,500 to $2,000 on everything from gifts to booze to eating in restaurants during the hectic holiday season. She recommends saving every receipt and tallying up the grand total to get a true picture of your expenses. Divide your total by 11 and start putting aside money now so you don’t have to go into debt next Christmas. So if you spent $2,500, for example, you’ll need to put aside $227 per month so you can do the same next year.

Get a personal (financial) trainer

Building your financial confidence muscles is a challenge so don’t do it alone, advises Keehn.

“In the new year people often hire personal trainers,” she says. “Now we know you don’t need to pay someone $90 an hour to watch you get on treadmill, but people do it because they know that personal trainer holds you accountable and that the trainer can spot your blind spots. When it comes to finances people just suffer in silence, but they need to get a pro.”

Great online resources can be found at and And if you’re completely tapped out there’s help, says Keehn, who recommends searching for a non-profit credit counsellor.

Lose the plastic (or at least watch it more closely)

Behavioural scientist Claire Tsai says paying for purchases with cash hurts much more than using a credit card. Research shows people spend less when using cash so that might be a solution to overspending, though not a highly practical one in today’s digital world.

Staying on top of your credit cards, especially during the holidays when spending is high, is advisable, says Tsai. Log into your credit card accounts frequently to track what you’ve spent or see if your financial institution will send you alerts on how much you’ve racked up. Tsai thinks wiser still might be the use of debit cards that earn reward points since that way you’re not borrowing to buy and you still get an incentive.

Make a list, check it twice

Budgeting your holiday gift buying is also wise as you always control your spending when you follow a game plan.

“When people go to grocery store with a shopping list they are less likely to make impulsive purchases,” says Tsai, an associate professor of marketing and a research fellow of the Behavioural Economics in Action Research Cluster at the University of Toronto’s Rotman School of Management. “When you go unprepared, hungry and tired, you have less self control and you’re more vulnerable.”

Plan with a buddy

She also likes the idea of setting up a financial-planning buddy system, likely a close friend to whom you disclose your spending goals and check in with every so often.

“They don’t need to see your bank account,” says Tsai. “But why not use the same buddy system many do in the area of weight loss and fitness? Your best friend Amy helps make you accountable because you report how much you’ve spent this week.”