How to Be Merry Without Worrying about the January Bills
You don't need us to tell you that prices are soaring and inflation is crushing the dollar's purchasing power.
By Michael Ganley | December 2, 2022
It’s been a front-page story (for this country’s few remaining newspapers) for about a year now, and it has only begun to let up in recent months. But be clear that “let up” doesn’t mean prices are going down — heaven forbid — just that the rate of increase has slowed. The annual inflation rate in Alberta was six per cent in August, but when you look just at groceries, prices were 9.4 per cent higher than a year earlier. Last year’s $60 turkey will cost you $66 this season. And this is happening at a time when Canadians have already been binge-borrowing, with non-mortgage debt up 5.2 per cent over the last year.
And now the holiday season is upon us, a time when we all, with varying degrees of hesitancy and willingness, swipe our cards to splurge on ourselves and those we love. But tight budgets don’t mean the holidays can’t be merry. We’re forever reminded that the holidays are meant for spending time with family and friends, not for shopping. Maybe we take that to heart this year. Perhaps this is an opportunity to simplify our approach and go old-school: Homemade cookies in a tin, potluck meals and hand-knitted sweaters. Get a smaller tree or no tree at all. Just hang out with the kids and play some games. Go for a hike. Give the gift of love and time and accept it in return.
For many Canadians, the issue is pressing. Mark Kalinowski, a financial educator and credit counsellor with the Credit Counselling Society, says his organization has seen a marked change in its clients over the last year. “A year ago we were seeing people who couldn’t make their budget work because it was tight,” he says, “but now they’re at the point where they’re relying on credit cards for the things they need.”
How to balance the demands of the season with the wish for a reasonable credit score? We asked Kalinowski for his advice on setting up a holiday plan.
The simplest way would be to follow the advice of the holy people and ascetics over the centuries and yearn not for worldly goods but for good in the world.
Failing that — and who among us expects to not fail that? — we turn to second-best options.
First, Kalinowski says, get in the right headspace. That means thinking several months ahead. “People really need to focus on how they want to feel after Christmas,” he says. Do you want to be stressed over incoming Visa bills, or do you want to try to head the feeling off now? Your choice.
Second, think about some of the small things you can give up, what Kalinowski calls nickel and diming your budget to death. “I talk a lot about coffee,” Kalinowski says. “I gave up coffee when I had kids so I could fill up their RESPs. What if you just get two venti frappes each week instead of five? You’ll end up with $20 in your wallet at the end of the week.” In a similar vein, do you really need Amazon Prime, Crave and Netfix, or could you cancel one or two of them and pick up a couple of holiday classics from the public library for free?
Next, consider consolidating your debt. Go to your bank and see if you can bring all your outstanding credit into one place, get an overall better rate and a fixed, monthly payment. Once you consolidate that credit, put the cards on ice. Do a cash holiday if possible.
Then, take a careful look at some of the big items in your budget — mortgage, insurance, energy and phone bills — and look to adjust them when the opportunity comes. When your contract is up, shop around. “You can save hundreds of dollars by shopping around,” Kalinowski says. And it almost goes without saying that you won’t be buying that new car. “If your old car still runs, keep it running,” he says. “It will be cheaper.”
Now what about all the holiday-specific expenses? Kalinowski says you should set budgets and set expectations. Talk to your family and friends about gift giving. Maybe remind them about the once-used food processor languishing in your basement, and the set of three miniature butter knives with ceramic fruits on the handles, and the other gifts that say, “I spent zero time and effort in buying this for you, but spent the money anyways.” Consider not buying gifts for people outside your immediate family or circle of friends. Simplify purchases for partners. Let the kids know they’ll be getting a few essentials and one really special thing.
“It’s not about buying crap,” he says. “We all get tied into buying crap so there’s something under the tree.”
Ultimately, it might be best to simply keep the eternal wisdom of Dr. Seuss in mind. Towards the end of How the Grinch Stole Christmas!, as the Grinch watches the Whos enjoying Christmas down in Whoville, despite his theft of all the gifts, he puzzles until his puzzler is sore. Then he thinks of something he hadn’t thought of before: “What if Christmas, he thought, doesn’t come from a store? What if Christmas, perhaps, means a little bit more?”