With Black Friday very close, Canadians nationwide, including many in Saskatchewan, are gearing up for the upcoming shopping frenzy.
Recent polls from BDO Canada show a notable eagerness among consumers to splurge during this festive period. However, BDO’s debt solutions branch is warning consumers to remain careful and on budget.
BDO Debt Solutions is raising red flags concerning the potential dangers of accumulating holiday debt. This warning comes at a time when many Canadians are already grappling with financial strains, tight budgets, and uncertainties stemming from inflation and rising interest rates,
In an interview with Global News, BDO Debt Solutions partner and senior vice-president, Jasmin Brown, explains how to resist that feeling of missing out during the season and shares some tips on budgeting.
Global News: You are with a debt solution company. Do people come to you for specific holiday incurred debt?
Brown: Holiday debt is something we see fairly often. We tend to get busy just after the holiday season, which shows that people either incurred debt over the holidays or had already outstanding debt and holiday spending just contributed to it. There are also surveys that show people have more debt regret after the holiday period. They spend a lot of money over Christmas and New Years and the get anxious when the payments in January start coming in.
During the holiday times there is a lot of pressure to spend money in lots of places. There are great events to attend, Christmas parties, concerts, shows and other activities. Those cost money and that can add it up if you bring your family along. There is, of course, the pressure to buy a wonderful and newest toy for your children. A lot of people unfortunately associate a fun holiday for the kids with the purchasing of expensive gifts — gifts they might not be able to afford.
Global News: What are some of the things shoppers should look out for?
Brown: Advertising is inescapable and companies will often try to seduce you with promotions or you will see friends and family on the social media posting about all the expensive things they are doing. That can put a lot of pressure on a person to compete and not miss out on fun times.
We call it festive FOMO (Fear Of Missing Out) and it is a very real thing. People will buy things on sale because they are afraid of missing the good deal. It is good to remember that if you buy something that you don’t necessarily need or normally would not purchase, you can ask yourself if that is really a saving. Buying things on credit can sometimes also turn out more expensive, when you spend more on paying off the interest than you save because of a promotion.
Global News: How can you deal with this festive form FOMO?
Brown: Many people use social media and they look at what their friends and neighbours are buying for their families. You might see the decorations, the events, a big tree or pictures of a huge family dinner.
It is important to keep in mind that you are not seeing the whole picture. You are not seeing the bank or credit card statements that come along with purchases with that. It is good to give yourself that reality check.
For people who struggle with that feeling of missing out and really feel they can’t get themselves away from the pressure, it might be a good idea to unplug. Holidays are supposed to be at time to relax, to enjoy yourself. So put the phone down, give yourself some space and preserve your budget by not being sucked into things you maybe can’t afford.
Global News: What tips do you have to get through the holiday period while avoiding financial pitfalls?
Brown: One of the best things is to make a holiday budget. Do some planning ahead, because having that budget can help you to say no to certain events. It can help to feel less sad to miss out on things. Instead look at the things you can actually afford to spend on.
Your ‘January 2nd self’ will thank you for the discipline and not having to have to deal with all that extra debt.”
Jasmin Brown works with BDO Debt Solutions, a company helping those struggling with debt. The company assists clients in finding realistic solutions and personal plans to pay off debts.