'Christmas-aholic' Canadians can come through the holidays debt free, experts say

Originally published Dec. 12.

The most wonderful time of the year is undoubtedly the most expensive time of the year, between Christmas shopping and party planning but some debt experts say it is possible to make it to January without drowning in debt.

Donna Carson, licensed insolvency trustee with MNP Debt shared her survival tips with the Calgary Eyeopener on Monday while Brian Betz, debt counsellor at the not for profit credit counseling agency, Money Mentors spoke with Alberta at Noon.

They both say the best way to avoid a holiday hangover is to start preparing early.

Have a plan

"We're talking Jan.1," said Betz.

He is elated at the thought of setting aside $100 each month beginning in January for travel, and buying one gift a month so it isn't such a shock to the system when Christmas rolls around.

He says habits like this are unfortunately few and far between, especially in Canada.

"We're Christmas-aholics there's no doubt about it."

Carson says if we don't start planning in January, we can make a budget for the last few weeks of December.

"Create a list. Stick to it."

Use cash

Carson crunched some numbers to illustrate how using a credit card to buy presents can cause interest chargesto balloon.

If you buy your dad an Apple Watch Series 1 (Retail $400):

• after 90 days: $413.40
• after 6 months $423.66
• after 1 year $444.60

If you buy your child aPlaystationVR Launch Bundle (Retail $700):

• after 90 days: $723.45
• after 6 months: $741.36
• after 1 year: $778.08

Using a finite amount of money helps keep costs under control, says Carson.

"Take that cash out of the bank, put it in an envelope... once it's done, it's done."

Bills don't take a holiday

Both money experts say it's a good reminder to set a budget for more than gifts.

Because of Canada's geography, traveling to see family over the holidays is a major component of spending.

Food and alcohol are often afterthoughts, even though there are numerous parties each year.

Betz recommends early savings to account for those things, with wiggle room for surprises like home maintenance and repairs.

One trick he suggests is buying Christmas wrapping paper in January when it's cheaper and keeping it for the next year.

"There's definitely a lot of people right now struggling with their debt," said Carson, adding that anyone who's already feeling the mounting pressure of the holidays should speak to a professional.

"Bankruptcy is not the only option that's out there."

Gift alternatives

Betz says he doesn't want to spoil the spirit of the season.

"I'm not here to say that you're not supposed to spend money. I'm not the Grinch. I love Christmas."

But he says it's worth having a conversation with your family about the costs of Christmas.

• Considerdrawing names, or doing a Secret Santa
• Only buy gifts for children under 18, as adult children become more self-sufficient.
• Spend quality time with family, rather than looking for a parking spot at the mall
• Make or bake your presents

"As your demographic in your family changes, I think you want to revisit these things on an ongoing basis," said Betz.