How to support your financial health this holiday season

On this episode of the BDO Financial Wellness Podcast, Licensed Insolvency Trustees Ron Gagnon and Nancy Snedden join our host, Tera Beljo, to talk about taking control of your holiday spending to make sure you have some fun while managing your financial wellness. Get ready to learn some helpful tips for family gift-buying, setting expectations and preparing financially for this holiday season.

 

Transcript: How to support your financial health this holiday season

Tera:

Hello, and welcome to the BDO Financial Wellness Podcast. I’m your host, Tera Beljo. This holiday season may look a little closer to normal, as restrictions lift and many of us have the opportunity again to share the season with our families. But the effects of the pandemic still linger, and budgets still may be tight. Because of this, we felt that part two of our holiday spending series is still relevant today. We thought that we would share it with you again. So, without further ado, here is how to budget for the holidays.  

Make holiday budgeting fun with a gift exchange

So, do you have any additional tips for saving money, spending less and avoiding debt over the holidays, Nancy?

 Nancy Snedden:

So, something that we've done with our family now the last number of years. We are a family, we're very close knit, we've always bought gifts for each other, but a few years ago, I said, "This is crazy. Everyone is spending so much money." And many people in our family, there was not anything that they really, really need. So why don't we do more of a gift exchange? So, everyone has a name and we set a limit that's really reasonable and will fit within everyone's budget. And we buy one gift and we all get to exchange gifts and we all get a gift, but we're not worrying about the additional money that we're going to have buying every single person a gift. 

So, talk with your friends and family and see how you can maybe make your spending a little more conscious this year. Try to cut back on some of the spending that you have, get-togethers as opposed to gift giving is also an option. What you need to remember is we are in a pandemic; many people's budgets are a little tighter this year. So, if you throw out an idea of why don't we get together for a potluck as long as you're in a province where you're allowed to get together. 

Tera:

Together, yes. 

Nancy Snedden:

…and are not restricted by numbers, even if you did a Zoom dinner, if that's an option for you and spend the time… 

Tera:

That's a great idea.

Nancy Snedden:

…and make the memories spending quality time with your friends and family, as opposed to picking up a gift that they may or may not need. 

Tera:

Well and the funny thing, you bring up the secret Santa gift exchange thing is that technology has made that so much easier. There are apps and websites now that randomly pick names for you and you have no way of knowing. You don't have to meet to do the grab out of the hat anymore, and you can add your wish lists to these gift exchanges, so check those out too. 

Nancy Snedden:

Absolutely. 

Tera:

Do you have anything to add Ron? 

Ron Gagnon:

Well, I'll just say to this point and with a bit of humor. I mean, if you do what Nancy is suggesting, you also have less of the chance of having that gift from an uncle or an aunt that you really don't want and then you try to wrap it again and send it off to someone else when you go for dinner. Well, you could avoid that. 

Tera:

The dreaded re-gift. 

Ron Gagnon:

Yes. I have one personally that I'm trying to get rid of at this point. 

Tera:

I ended up with one, actually from somebody and it turned out we loved it. I don't know if you know the movie, A Christmas Story, but that leg lamp. 

Ron Gagnon:

Oh. 

Tera:

Somebody got that and didn't want it and I ended up in a Santa exchange and ended up with it and people in my family fight over it. It's actually quite funny. 

Helping your family stay on budget is a gift in itself 

Ron Gagnon:

But getting back to a little more serious thing, I think the one thing maybe we didn't point out is make a plan with your family and your friends. So, Nancy touched on that point, but say, "Okay, let's all agree on what we want to do." It's not just the gift, it's the peripheral spending also. 

Nancy Snedden:

I was just going to say, think about ways that you can make a difference for your family too. Like if you know, there's someone in your family who's struggling, they may appreciate a grocery gift card this year more so than a box of chocolates or something that you may buy them. Because they do have a tight budget and they're going to appreciate that, knowing that you're thinking of them and what they're going to need for that reason. So, think of some outside-of-the-box ideas and how you can help out. If you yourself have a really tight budget, your family may appreciate, like I know my sister and brother-in-law love it, when we take their kids for a sleepover for a night. 

Tera:

Yes. 

Nancy Snedden:

Give some babysitting coupons, give some snow shoveling coupons, like something to your family in a card that they will appreciate, that's going to be a quality time thing for them, as opposed to you having to reach into your wallet. 

Ron Gagnon:

And also, just to think that because of the pandemic and because of a lot of the restrictions in the provinces, you're likely going to have a smaller group of people anyway, if any. So, you can discipline yourself to spend less and save a little money. 

Be honest about your own financial needs this holiday season 

Tera:

Great. So finally, I'd like to get your thoughts on why people should be thinking beyond the holidays. Traditionally, people just throw budget or things out the window because you do just want to get through the holidays, and you'll worry about your debt later. And so, we know that the year ahead is uncertain. We don't really know what's to come in terms of additional waves or job losses. I mean, some provinces are already in the second wave and shutdowns. So how should that uncertainty factor into our holiday spending decisions Ron? 

Ron Gagnon:

Well as you say, overspending can create a lot of stress in the upcoming months because it's uncertain, the future is uncertain. But in general, if you're overspending, you're spending too much money on interest and not on basic goods or not on an emergency fund or anything. So, it will add additional stress, even if things go well. I mean, you could lose your job again unfortunately, there may be shutdowns who knows what's going to happen at this point. Again, we talked earlier about an emergency fund, well, because we're talking about holiday spending in the holiday season, an emergency fund is a great gift to yourself. So that way you can have money aside so if, and likely when, something comes up, I mean, it's going to be there, and it'll take away a lot of that stress. 

Ask for gifts that help ease financial stress

 Nancy Snedden:

Yeah, and I would say too, don't be afraid to let others know if you really need an emergency fund. I mean, a great way to bring up the conversation, if someone saying to you for example, "What can I get you for Christmas? I'm not sure what I can be getting you this year." And you could say, "The pandemic has really taught me the importance of an emergency fund and more than anything, I'd really like rather than you spending money on something for me that that money could get deposited as part of my emergency savings for next year." The more that people talk about their finances and the more that people are open about what they really need, I think it helps everybody because there's likely others in your friends and family circle that are feeling the exact same way.

So, having the open conversation. And I would say beyond that, because we don't know what's going to happen, we don't know when the vaccine is going to come or how it's going to get distributed. Some people are saying the spring, some people are saying it could be summer or fall. So, I think we do need to plan ahead and make sure that we are thinking about what is the best way for me to budget for the holidays to make sure that I'm also budgeting and planning for the new year and really getting a plan. If you are already faced with some credit card debt or other types of debt, that you're making a plan to be able to deal with that in 2021. 

Ron Gagnon:

And the other thing, sorry Tera. 

Tera:

Oh, I'm sorry. 

Ron Gagnon:

No, that's okay. 

Tera:

No, that was my fault. 

Ron Gagnon:

The other thing is that when Nancy was talking about you could, instead of a traditional gift, you can help them with a bill or whatever, or maybe give a gift of time, well I would add because it's on a personal note. I mean, it would be my pleasure if someone who's struggling financially to basically fill their freezer for the upcoming months by just cooking and making some food that they can have when the times maybe be a little tougher. That food will be available for them and it's a nice gift because it comes from you. 

Nancy Snedden:

I love that. 

Give yourself the gift of debt advice by sitting down with a Licensed Insolvency Trustee 

Tera:

Great idea, that is a great idea. I know I said that was my final question, but in talking to you both this popped into my head. So, I thought I would ask, and I think Nancy, you and I have had this conversation outside of recording the podcast. What would you say to somebody who is struggling? And they know that they're reaching the point where the stress is too much and that they do need help, but they're scared to come in and have an appointment with you because they're scared that they're not going to have access to credit or access to funds so that they can have a great Christmas or a great holiday season with their family. What advice would you give to somebody in that situation? 

Nancy Snedden:

I think the greatest gift that they can give themselves Tera, is actually sitting down with someone and finding out what their options are. I hear time and time again from my clients and Ron, I'm sure you would agree, they come in, they have that initial meeting, just talking about their situation and knowing that there are options available, whether it is a bankruptcy or a consumer proposal, maybe it's some help with budgeting. Maybe it's we think that they may have the ability to do some refinance. There's all kinds of options that we go through with them but just knowing that those options are available, you can physically see sometimes the stress being lifted. You can see the weight being lifted off their shoulders just from that conversation. So, don't be afraid, there's no obligation to sit down and talk to someone. It's just getting the advice, so you know what the options are, whether that's prior to the holidays or once the holidays have passed, at least you know what your options are and you can make a plan. 

Find relief by learning about your options for debt relief 

Ron Gagnon:

I totally agree with that. I think that you see that relief when the people know that there is a solution or something's out there, or even that people understand them and feel for their situation. I think that helps a lot; it relieves a lot of pressure. I like to say sometimes before not wanting to do something, "You're being scared from something that you don't know; you're scared of the unknown. Find out what you're scared about in the worst-case scenario. There's nothing to be scared of, but you may think so. So come in, have a talk and likely you're going to feel a lot better." 

Nancy Snedden:

Yeah. 

Knowing your finances means knowing your budget for the holidays 

Tera:

Information is power. 

Nancy Snedden:

It really is. And oftentimes people feel like, "Well, right now I'm making my minimum payments, so I have a really good credit score." That's not always the case. So even though you're up to date in your payments, if you're really highly leveraged, so meaning that your available credit is almost maxed out or close to being maxed out, that has a negative impact on your credit score. So sometimes the best way to rebuild your credit is by filing something like a consumer proposal so that you can clear that credit score and then start the rebuilding process. 

Ron Gagnon:

Also, you might have a good credit score, but you'll be paying for the 35 years your credit card debt. 

Nancy Snedden:

Another very good point. 

Ron Gagnon:

You have good credit, but no financial capacity to do anything is not a solution either. 

Nancy Snedden:

That's right. 

Start your holiday off right with debt counselling from an LIT 

Tera:

And knowing before the holiday season, what your situation is by sitting down with a Licensed Insolvency Trustee, like I said, information is power. Then you know how much room you have to breathe or just having that information may help you to cut back in areas that you may not have even thought to cut back on. 

Nancy Snedden:

That's right. 

Tera:

I want to send out a huge thank you to BDO License Insolvency Trustees, Ron Gagnon and Nancy Snedden for taking the time out of their busy schedules to sit down and talk to me. And I'd like to wish you a joyous, stress-free holiday season spent with friends and family, both near and far, in person and virtually. And in the meantime, if you are looking for additional podcasts, videos, debt management resources, online tools, or expert advice, please visit our website DebtSolutions.BDO.ca. And remember, debt isn't the end of your story, your next chapter is waiting.

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