Dealing With Debt

Christmas Bills and Holiday Debt Hangover, What Can You Do?

By Stacy Yanchuk Oleksy

For many Canadians it’s “that” time, to face the monumental task of dealing with the Christmas bills and holiday debt hangover, now that the Christmas tree has been taken down and the decorations put away. This can be a very stressful time and cause a lot of money worries. It was hard to say no to all of the Christmas gifts, parties, socials, potlucks, charities, and let’s face it, food. And now we’re going to pay with our bank accounts and waistlines.

When Post-Holiday Debt and Spending Catch Up, Keep Your January Zen

Post-holiday debt can get to you, as holiday spending catches up. You’ve got no idea how you’ll make your minimum payments, let alone make a dint in paying the bills off. Take a deep breath. Take a few more. When we’re stressed, we tend to take shallow breaths. We lose oxygen and then wonder why we aren’t handling things too well. Breathing gives you oxygen to think, get creative, and solve problems. Your plan to pay off debt is one of the problems you need to solve. Here’s where to start:

Focus on Solutions to Deal with Money Problems

Decide how you want to feel about money. Do you want to feel peaceful, in control, energized, happy, confident, abundant, or some other feeling?

Get clear on what the issue is because if you don’t know what the issue is, how can you know what solution to implement? I used to be an employment counsellor and what I loved about the work is that it was solution-focused, very much like financial counselling and education. But the key was to figure out what the issue was.

Check out this example: if someone didn’t know what they wanted to do for work, the solution was to help them with some career decision making exercises. If someone didn’t have the skills needed for the job they wanted, they needed training. If someone didn’t know how to look for work but they were clear on what type of work they wanted and what they were qualified for, then the solution was to help them with some job search skills. And finally, if someone had difficulty keeping a job, then we’d work together on job maintenance skills like time management, communication, and conflict resolution.

How to Be Solution-Focused Depends on the Issue

Money is not that different. If you don’t even know where to begin because things are a big mess and you’re stressed, the solution is to work through your own money values, beliefs, desires and goals. It’s important to look below the surface otherwise you’ll just repeat the same behavior over and over. If you’re not sure where to start, contact us and we can help you with this.

But perhaps that’s not the issue, maybe it’s that you don’t know where your money is going each month. Then the solution is writing everything down that you spend for a few months to give you a clearer picture of your spending habits. Yes, it’s boring and tedious but it’s an absolute eye-opener. Once you get a clear picture of where your money is going, choose to either continue tracking or back off for a bit.
Maybe the issue is that you are using credit to supplement your living expenses and your debts are going up instead of down. The solution for this is to stop using credit, track your expenses, acknowledge if there have been any changes to your circumstances (e.g. reduction in household income, increase in household expenses), and align your income with your expenses. If they won’t align, then make a decision to either increase your income or decrease your expenses.
Or maybe some big life event happened (e.g. job loss, illness or injury, separation or divorce) and it completely derailed your finances. The solution is to get some support for the issue and reduce the financial damage as quickly as possible. One of our Credit Counsellors can help you sort through this and provide referrals as necessary to other professional services.

Determine What Caused Your Post-Holiday Bills

Now let’s go back to our original issue of the holiday bills coming in and your need for a plan to pay debt. Ask yourself…

Did Christmas just get away from you but within a few months, you’ll be on track again?
Was Christmas the straw that broke the camel’s back because your debts have been growing instead of shrinking over the past few years?
Did you have an a-ha moment after all of the gifts were opened and food was eaten, that the holiday season can be very expensive (and stressful), all for one day?
Or perhaps as the bills come in, you realize that you can be in a bit of a mind fog when it comes to spending and now you’re at a point where you’re not even sure where your money is going each month?

Maybe you would feel better completing a quick debt warning signs self-assessment about your situation. Regardless, once you’re clear on the issue, the solution is easier to find.

Be Realistic About Your Income and Expenses

Now that you know the issue, it’s time to take stock of your finances. This means it is time to write down some numbers. Remember to breathe through this process; letting your anxiety get the better of you will only make it feel worse. The numbers you’re going to write down include:

household net income (after taxes)
total household liabilities (including your secured debts like your mortgage, car loan, secured loan or line of credit)
all of your debts (credit cards, lines of credit, loans, payday loans, personal loans to friends and family)
all of your monthly expenses

If you’re not sure what your expenses are, check this interactive budgeting calculator out. Also take stock of your assets; they might provide you with options to deal with your debts (e.g. sell a second car to generate a lump sum of money).

Create a Reasonable Plan to Pay Off Debt

With firm numbers in hand, you can see the whole situation and decide that things are better than you thought, are just as you thought, or are worse than you thought. A plan can be as simple as setting some annual goals to get you to being debt free. For example:

Maybe your plan can be finding ways to trim your budget by $100 every month.
You could make a plan to know exactly where your money is going by tracking your expenses for 3 months.
You could put yourself on a debt repayment plan (avalanche or snowball) to pay down or pay off debt in 2019.

It’s your plan, you decide. Just don’t be afraid to ask for help if you need it.

Ask for Help If You Need It – No Judgement Attached

If you find yourself stuck and don’t know where to start, contact us sooner than later to make a free, confidential appointment with one of our Credit Counsellors. You can reach us toll free at 1-888-527-8999, chat with us anonymously online, or email us. A Counsellor will help you understand your situation with an unbiased, second set of eyes. They can help you build a budget, they’ll show you some tips and tricks to make sticking to your budget easier, and if needed, they will show you options to consolidate your unsecured debt into one simple monthly payment.

Don’t Get Overwhelmed by Your Christmas and Holiday Bills

You don’t need to get overwhelmed by your Christmas and holiday bills - they are what they are. With a plan, strategies to relax, a good look at your financial situation, and a plan to move forward, as they say – you’ve got this.

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