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6 ways to avoid holiday overspending

Posted by on Dec 13, 2011 in Moneyville, Quality of Life | 0 comments

By Sheryl Smolkin

Read this article and comments at Moneyville.ca 

Ontarians may have to tighten their belts when their credit card bills arrive in January, because the majority of the province’s consumers participating in a recent RBC survey say they plan to spend more than last year on gifts and other holiday items.

They intend to spend an average of $663 on gifts, roughly $50 more than last year’s $615. They also anticipate boosting their spending on other seasonal items like clothing, travel, decorations, beauty services, food/drink and entertainment to $572, as compared to $544 in 2010.

In 2010, more than one-third of Ontarians overspent their holiday budgets, spending an average of $402 more than planned. To help pay those extra bills, in the new year over spenders cut back on entertainment and day-to-day living expenses, limited use of credit cards and decreased money spent on daily coffee/lunch.

But enjoying the holidays doesn’t have to come with a big price tag.

While it is easy to get carried away with the holiday spirit when you are shopping, having a budget in mind before you start checking off your holiday gift list will help ensure you’re only spending what you know you can afford.

RBC offers six more savings tips for the holidays, and all year around:

1.     Curb your impulses. Count to 30 before impulse buying in a store, or wait 24 hours before making an online shopping decision.
2.     Pay yourself first. Make your savings plan part of your bill paying routine, just like cable, utilities and mortgage payments.
3.     Track your expenses. Make a list of all your expenditures over three months to see where there are opportunities to turn spending into saving.
4.     Keep a separate savings account. Set up an account dedicated to savings; in this way, your savings won’t get mixed in with your day-to-day cash.
5.     Set a target date for your savings goal. Having a deadline can help you decide how much to put away and how often.
6.     Visualize your savings goal. Are you saving for a vacation? A big screen TV? Keep a photo of your dream on hand, to inspire you to continue saving.

Using cash on hand as opposed to credit is another way to better manage holiday expenditures. The RBC survey reveals that many savvy Canadians are already eschewing credit for cash (55 per cent) or using their debit cards (27 per cent) to pay for holiday purchases.

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