While there are many cheerful terms used to describe Christmas, unfortunately, there is one negative one that has also become linked to this time of year – and that would be debt.
Debt can be a negative outcome which can occur at any time of year. However, it can also be a major thorn in the sides of many individuals as they shop for Christmas gifts and other festive items associated with this holiday.
If you find yourself in this situation or at the very least want to be aware of how Christmas spending can impact – or be impacted by Debt, a good place to start is to understand just how much debt is typically associated with Christmas.
To help answer the question of ‘how much debt does the average Canadian rack up at Christmas?’ – here is some insight into the nature of this annual shopping adventure.
For starters, it is estimated that Canadians have high debt levels reaching well beyond the $25,000 mark already. Moreover, this is an increase from previous years as well and is also on the rise with each year over the past few years.
For many, holiday spending will most likely involve the use of a credit card – or two, and this of course is only adding to their credit balance and credit card debt. With that being said, it is far too easy to spend beyond our means when it comes to using a credit card, therefore is where debt can become a real problem.
Since many consumers carry credit card balances and do not pay off their credit card in full each month, this means that credit card debt is bound to occur. With high interest rates attached to many cards, this means a higher level of interest charges will take place and credit card debt, harder to overcome.
Next, if consumers are not limited to their credit spending and instead opt to pay with debit or cash, it can still be a major challenge to avoid overspending. With overdraws and saved money, shoppers will still need to be diligent with and conscious not to spend too much of their hard earned money.
For example, if an individual typically follows a budget as well as has set aside a certain amount of income for spending, it is likely that this all year-round budget may not align with the demands of their Christmas spending. With this being the case, re-evaluating one’s budget as December approaches is a good idea as this can help shoppers avoid overdrafts, as well as having to dip into their other savings to make sure they keep up with the ‘Joneses’ this holiday.
While gift-giving takes up a large portion of Christmas spending, there are many other expenses to also factor in. For example, items such as food, alcohol, decorations, and even travel are also likely to be their list. Depending on whether one is hosting a holiday gathering or attending one, the purchase and preparation of food and beverages will typically be included and will also amount to a lot of additional spending.
Driving down any street, it is also likely to notice that many homes will be decked out with lights and decorations – further adding to the expense associated with annual Christmas traditions.cIn addition to food and tinsel, holiday travel costs will also range from gas expenses to airfare and this of course will mean that Christmas spending has the potential to be even higher, all of this which can add to debt levels this December.
So how much debt does the average Canadian actually spend each Christmas?
Well, in a recent survey of Christmas shoppers, the average rate of spending was calculated to be around the $1000 – $2000 mark. For others however, it may be higher.
As previously mentioned, if all or some of these charges are credit card payments, then it is important to think about how much this will add to an individual’s overall credit card balance. Furthermore, should this balance be carried over into the next month or more, further credit debt is a real possibility for many Canadians at Christmas time.
Now with a glimpse into the potential volume of debt levels associated with Christmas spending, it is time to think more about budgeting accordingly – even aiming to cut back drastically on our overall holiday spending.
After all, we can all still enjoy all of the joyful sentiments attached to this holiday, without having to spend well beyond our financial capabilities.
