Let the season shine with a holiday budget!
December 13, 2017
By Jane Rooney, Canada’s Financial Literacy Leader
It’s that time of year when the cold weather pushes us indoors, and we spend more time with family and friends, attending parties and other get-togethers. In stores, the lights are glittering, the music is playing, and excitement is building towards the holidays. It’s a time of year that shines.
But the desire to make the holidays magical can sometimes cloud our vision, and lead to a dark storm of financial obligations come January.
During this season, most of us are tempted to take on more debt. But the statistics show many of us aren’t in a good position to do so.
Just last month, the Organisation for Economic Cooperation and Development released figures showing that among 28 advanced and emerging economies, Canada has the highest level of household debt.
And earlier this fall, Canada’s debt-to-income ratio reached a record 168 percent, according to Statistics Canada.
The truth is, many Canadians are having trouble paying their bills, let alone planning and saving for the future. Add to that the growing complexity of financial products and services, and the rapidly-changing digital marketplace, and many Canadians are having trouble just keeping up.
This is why 47 percent of employed Canadians say they’re living paycheque to paycheque, according to a survey this year by the Canadian Payroll Association. And 35 percent of Canadians feel overwhelmed by their debt.
Clearly, overspending during the holidays can deepen these serious financial problems. And financial stress can have a severe impact on physical and mental health.
The good news is that holiday debt can be avoided. A few simple steps can make the difference between a holiday season you can enjoy, and one that leads to more stress and unhappiness in the New Year.
A family meeting is a good place to start. Sit down together and let everyone know it’s time to create a holiday budget so that the family can spend the holidays without worry. Track the money coming in and going out before you determine how much is left for gifts and other items like cards, holiday food and supplies. Be clear about how much money is available per gift or per person.
Keeping expectations in check will mean everyone can enjoy the true spirit of the holidays. That can include spending quality time with friends and family. When 2018 rolls around, you might even decide to follow a household budget all the time! Your finances will thank you.
I just want to add that it’s been a wonderful year full of opportunities for me to learn and connect, as we continue our efforts to strengthen financial literacy in Canada. On behalf of my team at the Financial Consumer Agency of Canada, I’d like to extend my warmest wishes to you and your families for a happy, safe and stress-free holiday season!
See you in 2018.
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