Ted Michalos, CA, Mississauga Bankruptcy Trustee
I work with Brian McIlmoyle in our Mississauga consumer proposal and bankruptcy office helping people deal with their debts. Here’s my advice for budgeting and planning for next Christmas.
I hate to be the bearer of bad news, but in January the first round of “Christmas bills” start arriving in your mail box…
If you’d like to avoid this problem next year, now is the time to start planning for Christmas next year. I can see your eyes rolling in your head, “We just cleaned up from this Christmas and you want us to start thinking about next year? You’re nuts!”
Maybe, but give me a couple of minutes of your time to make a serious suggestion.
As the Christmas bills roll in, try and figure out just how much you spent this year. $300? $500? $1,000? More? Whatever the amount, did you pay with cash or put it on credit? If you paid on credit, do you have a plan to pay off the debt?
Most people over spend at Christmas – which is ok, but only if they have a plan to pay for it.
The best way to avoid Christmas bills in 2012 is to save enough money between now and then to pay cash for your gift buying this year. Take whatever amount you spent in 2011 and divide it by 10 – that’s your monthly saving target.
If you spent $1,000 on Christmas 2011 and you want to pay cash for Christmas 2012 then you need to find a way to set aside $100 per month starting in February (and running to November) in order to have the money you need to do so.
You can pay your bills, and create a savings plan for next year, by not budgeting; just pay your bills as often as you get paid, or set aside money for next Christmas every payday.
The hard part, the really hard part, is doing this for the first time. If you used credit to pay for your shopping this Christmas, then you have those bills to pay off. Finding the extra $100 (or whatever number you need) every month will be difficult. Having the discipline not to spend your Christmas savings may be even harder, but you need to do it.
It is like dieting (the OTHER Christmas nightmare). Set a goal for yourself – in this case saving a set amount of money each month and stick to it.
Happy New Year everyone – here’s hoping 2012 finds you happy, healthy and prosperous.
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