5 Ways to Financially Recover from Post-Holiday Spending

By Sarjae Irving

 

How much did you plan on spending this holiday season? How much did you actually spend? Did you know that close to one-quarter of the Canadian population overspend during the holidays?

 

 

A recent report from Madeinca.ca shared that Canadians were most likely to overspend by up to $100, with 27% of consumers falling into this group. 19% of consumers overspend between $101 and $200 while 16% of people overspend by $401-$500. Surprisingly, many Canadians go over the budget they set for themselves by $1,000 with 7% of consumers in this category.

We connected with Shannon Kennedy, from Consolidated Credit Union, an expert in personal finance and a champion for financial literacy. Kennedy provided an engaging discussion about holiday spending and financial management. 

 

INBETWEEN: How much do Canadians typically overspend at Christmas?

Kennedy: On average, Canadians typically spend between $1,400-$1,600 on gifts, travel, food and experiences over the holidays. While budgeting is personal, and the amounts spent and allotted by each individual vary, we can certainly see how these amounts impact Canadians and their finances.

 

INBETWEEN: When January rolls around, the bills come in. How can Canadians stay on budget or create a budget to get back on the financial track?

Kennedy: It can certainly be overwhelming to examine your finances following the holidays, and perhaps some overspending, here are some steps that Canadians can take to help get their finances back on track following the holidays:

 

• Contact your local bank or credit union and speak to a financial expert. This can help you create a customized debt repayment plan. Working with a financial expert is free and will help you see things from a different lens than you may have – plus, they are experts for a reason, they’ll have tons of knowledge to share with you.
• Set realistic financial goals. I always say that budgeting and debt repayment is like a diet: if you’re too restrictive, or set unrealistic financial goals, you’re likely to fail. Establish SMART (specific, measurable, achievable, relevant and time-bound) goals to make your plan more achievable, and bite-sized so it’s not so overwhelming.
• Prioritize essential expenses and distinguish between essential and non-essential expenses. Prioritize necessities like housing, utilities, groceries, gas, and debt repayments. See if there are other areas (such as eating out, online shopping or subscriptions) where you can cut back – even if the cutback is only temporary.
• Track your spending and be sure to do it regularly. Monitor where exactly your money is coming from and where it’s going to. This helps ensure that your spending habits are in line with your budget. It doesn’t have to be anything fancy, but just having a space to check in on your money is important.
• Review and adjust your budget as often as needed. Life happens, and circumstances change, and so should your budget. Regularly review and adjust your budget to reflect changes in income, expenses, or financial goals. This helps you make sure you’re on track. Don’t be scared to adjust it as many times as it takes to make your finances work for you.

 

Essentially, take a break from spending. Consider a no-spending month for this first month or two. Also, reconsider your expenses to see if there is anything that you can cut back on or eliminate from your non-essentials. Most importantly, once you have a plan to regain financial freedom from your holiday overspending, do not deviate as this will only cause delays.