By Charles Lefebvre

Adviser shares tips to avoid holiday debt

Nov 27, 2018 | 3:18 PM

MEDICINE HAT, AB — With Black Friday and Cyber Monday in the books, the holiday shopping season is in full swing.

However, a new report from Manulife sheds light on the spending habits of Canadians during the season, and the impact it may have on your financial situation going forward.

The report, released last Thursday, says six out of 10 Canadians surveyed do not have a budget in place for the holiday season, and say they are likely to overspend. Of the people surveyed, three out of 10 say they end up regretting the amount of money they had spent during the holidays.

“I think what it is, is that people have the desire to buy things, even when they don’t have the means to buy them,” said Brian Veres, a licensed insolvency trustee with BDO Financial Recovery Services in Medicine Hat. “They’re trying to impress kids, family and maybe their neighbours. It’s called fear of missing out. “It leads people to spend more money than they can, either they don’t have the cash for it, or they put it on a credit card.”

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We posed the question on Facebook on Tuesday, asking Medicine Hat residents how they plan to budget for holiday shopping.

One poster says she receives a bonus from her workplace in December, which she uses as her budget for shopping.

Another poster says they don’t exchange gifts with adult children, saying Christmas is about family, not gifts. The poster says if her adult children want to give her a gift, they ask for an experience such as a family outing.

Veres says the most important thing people can do to avoid going into holiday debt is budget for the season.

“Determine how much cash you can spend on gifts, and allocate it accordingly,” he said.

Veres adds people should not put their purchases on credit cards unless they have the money to pay off the cards quickly to avoid interest fees.

He adds with uncertainty looming in the economy next year, it’s wise for people to do their part to ensure their finances are healthy.

“The way the economy is looking in Alberta, the next year, two years, you ought to be conservative with your spending, because I don’t know what time is going to bring us,” he said. “Spending what you can, and absolutely not one penny more will go a long way to helping you.”