The after Christmas financial crunch: strategies to manage debt

January 8, 2014 · 0 Comments

Almost immediately after the Christmas rush and excitement passes, new stress finds its way into our lives as the cost of Christmas begins to arrive in bills and credit card debt.

While many will be struggling financially even more than the before Christmas, there are options available to help people cope and form a plan of attack to get out of debt.

Financial planning services are available in every banking institution, independent financial advisors can be sought out to help plan ahead and create a personal budget to be followed on a monthly basis.

The general advice is the same across the board and there are a few obvious ways to begin financial recovery. The first step commonly recommended is to avoid unnecessary spending all together, impractical over Christmas but setting and average amount to spend and sticking to that set amount is a great way to keep spending under thumb.

The second step is perhaps the most obvious and coincidentally the one most not followed. Never spend money you don’t have. On average Canadians spend upwards of $1000 over Christmas and that amount does not include credit card spending. The over use of credit cards is pummelling Canadians sending the entire country into a situation of living beyond means available. This is very similar to digging a financial hole so deep few see the light of day, a way out.

Simply avoid using credit cards if possible. Set a goal, ideally before summer to have all the debt accumulated over Christmas paid off by following the monthly plan of attack budget and live within your means.

For those who already find themselves passed this simple solution, consolidation of debt counselling services might be an option to consider where a quick grouping of all bills can be managed at a low monthly cost and a conversation with your bank can steer you in the right direction.

One common mistake people often make is waiting too long to confront their financial head on. Some find financial debt embarrassing and banks, intimidating. Not only will people find they are not in that financial debt boat alone, they will discover that banks want to help. In today’s economy a simple practice is to make an appointment with your bank sooner than later and get the help you need to be on the path to a debt free life.

Last but not least, tips to save money over Christmas are also simple. Never pay full price for expensive items, always pay with cash if possible, include shopping and browsing on line as free shipping is a plus, and homemade gifts cost far less and are greatly appreciated. Think outside the realm of traditional commercialism when gift giving, bigger and most expensive is not always better, it truly is the thought that counts.

By Alex Sher