Between the clock striking 12 and the group singing the final verse of Old Lyne Sang, there takes place a subtle yet important shift in your perspective. You go from someone who’s ready to enjoy the holidays to someone who’s ready to work on the next 12 months. Part of that transition of course involves making New Year’s resolutions, so you can focus on self-improvement in 2018. While many people target their weight, health, or career with their resolutions, the New Year signifies an important time for you to consider your finances. After a long and expensive holiday season, they need time to recover.
Christmas may be just one day, but the leadup to the big celebration lasts several weeks. Economists estimate the majority of Canadians start shopping for the season as early as November. This head start is helped by Black Friday and Cyber Monday sales, now regular features of the holidays just like they are in America. Spending that starts in late November is expected to continue until January 1.
By the New Year, PricewaterhouseCoopers (or PwC) expects the average Canadian will spend as much as $1,507 this year on the holidays. It’s a figure that has more or less stayed the same since last year. In covering things like gifts, entertainment, and travel, it fails to account for other expenses of the season. The cost of winter maintenance on homes and vehicles often goes overlooked, but things like furnace repair and winter tires can have a significant impact on budgets around the holidays.
If you haven’t adjusted your budget for the holidays, then the $1.5k it adds in expenses can be hard to handle. Some Canadians end up using their savings and relying on credit cards or payday loans to get through the season. In which case, a financially secure New Year’s resolution is at its most important.
If you’ve cleared out your savings, then you have no way to greet any surprise expenses in 2018 on your own. Your car’s suspension might need fixing, or your furnace may need work to heat your home. If the cost of these repairs exceeds your surplus cash for any given paycheque, then you’ll have to rely on personal loans for help. If you expect to avoid paying late fees on what you owe, your goal to spend less and save more is especially important.
Eventually, if you stick with your money resolution, you can pay off holiday debt and start rebuilding your savings. It won’t be easy. The holidays make it easy to overspend, and you may have gotten into the habit of brandishing your credit card anytime you see something you like. But if you work hard, and search out ways to resist temptations and cut out spending, you can undo the damage the holidays have wreaked on your budget. It all starts with your resolution to save, so make sure saving is your priority in the New Year.