4 tips to prevent overspending this holiday season

It is December and the holiday season is in full swing. While many Canadians are focused on friends, family and celebration, spending can become an afterthought.

P.E.I. saw a 20 per cent increase in insolvencies — people who are unable to pay their debts — from October 2018 to October 2019. That is the highest increase in all of Atlantic Canada, according to numbers released earlier this week by Statistics Canada.

"It's not a good thing. Those numbers are just way too high, considering the interest rates are an all-time low," said John Eisner, president of Credit Counselling Services of Atlantic Canada.

October saw the highest number of insolvencies filed in a decade across Canada, he said.

Eisner said there are many factors that contribute to overspending, especially during the holiday season. And it is not just gift buying driving up debt.

There are so many ways we can think about it, but I guess what it comes down to is thinking outside the box. — John Eisner, Credit Counselling Services of Atlantic Canada

"Christmas is not just about gifts, it can be about many contributing factors, a staff Christmas party, eating out more," he said.

While December can become an expensive time of year, there are some things consumers can do to reduce their holiday spending.

1. Secret Santa

Many Islanders come from big families and Eisner suggests not buying a gift for every member of the family.

"Trying to buy for brothers and sisters, nephews and nieces, maybe that is the time the family has a big conversation with all its members and says, 'Look, maybe we should do a secret Santa,'" he said.

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Buying a single gift for a secret Santa instead of buying for every family member cuts down on everyone's costs, Eisner said.

"Trying times are out there and we need to look at other options," he said.

Eisner said another easy way to cut down on holiday spending is to avoid eating out by doing things like hosting a potluck dinner.

2. Shop online

Online shopping is a good way to save a few extra dollars during the holidays, Eisner said.

Shopping online also lets people avoid congested department stores and consumers cut down on other costs like gas when they shop from home, Eisner said.

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"Probably more than anything you are not faced with the signs and the hustle and the bustle," he said. "You don't get caught up in it. You are in a little bit better control online."

However, many online purchases are made with credit cards and that is something Eisner said you have to be careful with.

"Trust me, it just allows you to buy today without any thought process going into it," he said.

3. Side hustle

Though the holiday season is busy, it might be a good idea to set up a side hustle such as walking dogs or tutoring.

"I think it is a really good idea if it all fits," Eisner said. "Making that extra money doesn't mean you have to spend it."

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Eisner said additional income can be put toward next holiday season.

"It's much easier to work through the holiday over a 12-month scenario, put a budget together and say 'OK this is how much money we need to put aside,'" Eisner said.

4. Spend time, not money

Eisner said the best gifts people can offer are "gifts of time."

"Everyone has a different skill set maybe they could offer to a loved one," he said.

"Maybe your siblings have a young family. Why not give them a gift card saying you'll provide them a babysitting weekend, or a day. We need to think outside the box for those where money is tight."

The less you give the more meaningful it is. — John Eisner, Credit Counselling Services of Atlantic Canada

People just have to be creative with their gifts this time of year — offer to paint a room or make a craft, Eisner said.

"There are so many ways we can think about it, but I guess what it comes down to is thinking outside the box," he said.

Eisner said the important thing to remember this holiday season is not to overspend, because no one wants to deal with a big credit bill in the new year.

"The more you give, the less meaningful it is. The less you give the more meaningful it is," Eisner said.

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