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I don’t know about you, but recently in my hometown, things have been rough. We are facing economic downturn and have been for quite some time now. There have been vast amounts of layoffs, job loss, and unemployment rates are much higher than normal. This year alone there have been over 18,000 people laid off, and that doesn’t include contractors left without renewal. Take a look at these stories about layoffs , and this article about our cities economy.
It’s quite depressing and more than anything – it’s scary. Our community and much of my friends and family rely on the oil and gas/energy sector, which is making the holiday season seem much gloomier than it should be. Christmas is meant to bring joy and relaxation, but it seems it will bring stress, depression, and a spiral towards drastic levels of consumer debt.
How can you prepare?
GIFT WITHIN YOUR MEANS
One of the most important ways to curtail financial struggle is by being prepared. Always have an emergency fund that is enough to last you 3-6 months of unemployment, never use credit unless you can afford the payment at month-end. One way to say it simply is:live within your means.
Although these are things I find simplistic and common knowledge, I realize that many of my fellow Calgarians are on Santa’s naughty list when it comes to financial management. If you are struggling to afford your mortgage while you have a job, what makes you think you’ll be able to manage when you lose your only source of income? Make wise decisions when it comes to your lifestyle.
Here are my 6 tips for a hard-knock Christmas:
1. Build an appropriate budget
This doesn’t mean spending $300 on each family member including your significant other. Make smart decisions. Recommending a “Secret Santa” is the obvious choice, but what about hosting a DIY Christmas where all gifts must be homemade and under $20. Chances are you’ll end up getting something much more special, and enjoy the creativity factor yourself. As for significant other gifts – isn’t being with each other during the holiday season enough? Choose to save that money for a larger financial goal you can accomplish together, and avoid the added credit card debt come January.
2. Live within your means
This tip comes to head year round. No one should be living paycheque to paycheque if they are making above $30,000 annually. Although this city is expensive, it’s also got plenty of options for those suffering financially. Review your living expenses, food costs, and really all bills to see if you’re spending appropriately. If your monthly income is $2,000 and you’re always spending $2,200, you are definitely NOT living within your means.
3. Don’t dip into your savings
Although Christmas is important and we don’t want to let anyone down, it would be more of a letdown to spend your emergency fund or savings on things we cannot truly afford. Savings accounts aren’t for gifts, they are for personal goals. If you’re strapped for cash, find a part-time job wrapping presents, walking dogs, or working retail. It’s worth it to swallow your pride if it means your New Year will stay debt-free and financially secure.
4. Honesty is the best policy
While being honest with family and friends is important, in this situation I want you to be honest with yourself. If you know you are financially unstable and cannot afford to buy Christmas gifts, let alone food this holiday season – it’s time to ask for help. Calgary has so many not-for-profit organizations that are more than willing to provide you with counselling and support. Let them help you learn to budget, prepare, and pay off debts.
5. Cancel Christmas gifts
There is no shame with going gift-free around the holiday season. Offer to do odd favors and tasks for your loved ones instead. Why not shovel your parent’s sidewalk for all of December, or sing your grandparents a Christmas carol as a gift. Your time and skills can be more precious than a product or gift card ever would be.
6. Limit vacations
We’ve all heard of a staycation right? Well now is the time to try it out. Instead of spending money to go somewhere hot for the winter season, stay home and curl up by the fireplace with coffee and Baileys. A holiday might push you over the edge financially, and it’s best to not add the stress you’re most likely already experiencing.
As sad as I am to read and hear all of these stories of financial destruction in homes, I am not surprised. Most people tend to spend money that they do not have, live in homes they cannot afford, and purchase items they do not need. We are all living one giant version of Keeping up with the Joneses, and it’s eventually going to take its toll.
Do you have any other tips for people to save over the holiday season? Let me know in the comments.
PS: Happy Thanksgiving to all of my American readers!
Oh no, you missed the live webinar! But, good news: Mixed Up Money is pleased to share a resource for anyone planning for a future child or family.
Mixed Up Money is pleased to share a free resource for anyone looking to cut back on non-essential spending. My most-requested product is these monthly calendars to share on your Instagram story, use as a phone background, or print off to track your spending habits.
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