Mastering Winter Holiday Spending

by Craig Fryzuk, CIRP, LIT
December 20, 2021

While it can be the most wonderful time of the year, it can also be the most expensive.  As a Licensed Insolvency Trustee working in the insolvency space for twenty-five years, I’ve seen my fair share of people who have completely turned their lives around, freed themselves from the burden of debt, and became financially stable and prosperous.  Managing large expenditures is a key factor in these successful turn-around stories.  As the holidays are fast approaching, let’s look at some ways to set ourselves up for success this holiday season and the many to follow.

Alternative Gifts

If you typically get caught up in the holiday spirit of giving, you are not alone.  Retailers spend millions on marketing the hottest, must-have items to you and your loved ones.  But let’s not forget that there are many alternative gifts that won’t require you to go into debt.

You might consider the following gift ideas:

  • baked goods
  • handmade art
  • repurposed items
  • photo books
  • acts of service
  • spending time together

If someone is special enough for you to be giving them a gift, you probably know what type of gift is going to mean the most to them.  A little thought and planning could really build a special memory. 

Track Extra Spending This Year

The biggest hit on your bank account may not be gifts.  Don’t forget that there are the additional costs of travel, entertaining expenses like food and ‘nog, outfits for the company holiday party, and decorations.  You can easily track these costs as a note on your phone, on a notepad that you keep handy to track your festive purchases, or by reviewing your bank and credit card statements in January to record how much extra you spent.  This number will be your guidepost for future holiday season spending. 

The #1 Way to Win Christmas

The single most-valuable technique that has reduced holiday stress for myself, and those that we have helped restructure, is planning ahead.  Without a doubt, the holidays will arrive at the exact same time next year.  The amount that you spent this year will be a good indication of what you will be spending a year from now. 

This holiday hack uses the tracked spending amount (or your best estimate of what you spent) divided by 12 to give you an amount to put aside each month starting in January.  For example, if you discover you spent about $1,200 more in December than you normally do, then you would put aside $100 each month starting in January.  When next December rolls around, you’ll be ready to dominate the holidays without using credit and without buyers’ remorse.  This can easily be set up using online banking, or by visiting your bank to set up a separate high-interest savings account and have money automatically moved to this account each month.  Or you could cram your money into a Christmas stocking hidden under your bed—the results will be about the same.  

Remember, it’s about the spirit of giving, not the gifts.  Going into debt and causing stress for yourself is not the goal.  If you are interested in hearing more on this topic, the Canadian Association of Insolvency and Restructuring Professionals recently hosted a Facebook Live event where professionals from across the country shared their best holiday spending tips (starting around the 29-minute mark):

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Holiday Spending Tips