73 – Finding New Ways To Avoid The Christmas Debt Hangover

Wayne Kay 00:04
Welcome to the Debt Matters podcast, where we help Canadians find solutions to their debt with Licensed Insolvency Trustees from across Canada.

I’m Wayne kay. Today we’re going to talk about that Christmas debt hangover and what you do if you’re in it. So, the Christmas debt hangover, of course, we’re talking about all the money that you just spent over the holiday season. We’re going to find out if more people actually file Bankruptcies at the beginning of the year because of Christmas debt and how you can avoid it.

We’re going to get you all set up. It’s all coming up today. My guest is Bonnie Hooley from LCTaylor Licensed Insolvency Trustee with offices in Winnipeg and Kenora.

Bonnie Hooley 00:46
Hi, it’s good to talk to you again, Wayne.

Wayne Kay 00:47
Great to have you here, and hopefully you had a great Christmas.

Bonnie Hooley 00:51
I did. Too much eating and too much family, but otherwise good.

Wayne Kay 00:57
We won’t tell the family that they were too much. The eating – that is the thing.

I actually saw something today talking about how many pounds we actually gain over the entire holiday season. And I think that would start in December, but it was like 4 to10 pounds on average. Yes, isn’t that something? 

There’s a lot of work to get rid of that, Bonnie, but it’s also a lot to get rid of debt and the hangover of money. And that’s what we’re going to be talking about today. Christmas debt hangover.

Bonnie Hooley 01:28
Sounds like a plan.

Wayne Kay 01:30
Perfect time to be jumping into this.

Bonnie Hooley 01:31
It’s an unusual name for a topic, but we thought that it kind of captured what people are actually feeling, because a lot of people who have over imbibed know what a real hangover feels like. And so a debt hangover kind of gives you the impression of what we’re going to be talking about today.

Wayne Kay 01:51
And do you think a lot of Canadians have these Christmas debt hangovers?

Bonnie Hooley 01:57
Well, it’s not as common a problem as you would think. And I don’t think it’s as big a problem as before. But for the people who it is a problem for, it’s a very big problem. And happens for a lot of reasons. We all plan not to overeat or over drink at Christmas, and many of us plan not to overspend. 

And yet, for a lot of people, they have a personality that they really need to please or there’s the need to fit in. And sometimes there’s family or cultural expectations. So, ironically, the same things that sometimes cause us to over drink and have a real hangover are the same things that lead us to the debt hangover. 

And unlike drinking, the debt hangover is not always just because of the money spent on gifts. It could be as a result of spending too much on the food for the family, we have over or spending too much on alcohol that causes real hangovers.

Or maybe we have to travel to see people or go places. And so all of those things end up with spending more than we plan to. And then we have that regret that you have when you have a real hangover and that feeling like, gee, I never want to do this again.

Wayne Kay 03:17
So that’s what the Christmas debt hangover is. It’s that the feeling, knowing that you’ve gone too far and you’re like, what am I going to do now? Right?

Bonnie Hooley 03:28
Yes. Very similar symptoms to a real hangover just with regard to how much you spent.

Wayne Kay 03:35
But it’s an awful time of year for different families –  this is how they show their love, by the more expense, more money they spend on gifts. And it’s sad, but it’s true. And it depends on how you were raised, I guess, on how much you spend at Christmas time.

Bonnie Hooley 03:57
Yes, I know. Like for my younger sister, when her son had his first Christmas, he wasn’t even old enough to unwrap the presents. They had a living room full of presents that they wrapped for him and spent way more than they could afford just because that was the expectation they had. We want to give our kid the best Christmas ever.

The same thing happens with food. You’re having people over, so you buy better food, you buy more food, you buy the fancy foods. Or I know for my husband, sometimes he likes to buy chocolates, and there was one year he was buying, like, a box of chocolate a day. I’m surprised he’s still with me. But that’s like a bit of overspending on things that where you can truly say, I’ve overdone it.

Wayne Kay 04:43
Yes, okay. And you say it’s not as big a problem as I would think. I would have thought this would have been a bigger problem, actually.

Bonnie Hooley 04:51
Well, I think it’s not as big a problem because some people plan for it and some people have sort of reminded themselves, or we remind one another that there’s other ways to accomplish the same goals without overdoing it. So I think that’s why it’s not as big a problem as it once was.

And even as far as Christmas goes, you probably see more and more families doing less Christmas than they used to. Even the number of Christmas decorations that are for sale in the malls aren’t as many as there used to be. So I think that’s why it’s not as big a problem as it used to be.

Wayne Kay 05:28
But you mentioned food. Canadians are definitely struggling with paying their grocery bills because they’re just so high.

We’ve seen such a jump. And turkeys, I know turkeys here were running $60, $70 to get a big turkey, and my wife and I were like, there’s no way we’re spending that on a turkey. Because, first off, I don’t like turkey.

Bonnie Hooley 05:52
And yes, that’s a really good reason not to spend on it.

Wayne Kay 05:55
I know, but she loves turkey, so she always wants to buy it. And then we have turkey for, like, 14 weeks in a row, and so we ended up well, so I got a ham for like, $18, and it was awesome. 

She snuck in a small turkey, so we ended up with both. But the point is, you don’t have to spend all this money because, well, the tradition says we have to have a big turkey. Well, we can go with a ham or we can just go with something else.

Bonnie Hooley 06:24
Yes. And, you know, that is a real thing that a lot of Canadians struggled with this year, because I know that there were discussions around the office and around my family. Do we do the turkey because it’s tradition and break the bank? Or do we be realistic and say, you don’t have to have turkey on that day, but then now you’ve broken a tradition. And for some people, that’s like a cardinal rule.

Wayne Kay 06:46
Really? Wow. Okay. For me, the traditional rule is all about just hanging out with a family. That’s the best part, just having the kids over and it’s just a great time. I don’t worry too much about the food, but I guess for some families, that is an important piece of the puzzle.

Bonnie Hooley 07:03
Yes, for traditionalists and that’s like another personality type, they’re repeating the same things and checking off the boxes that we did this again, we did this again is really important. 

So how we compromised for the traditionalists in the family is we just bought a smaller turkey and like, you had additional food instead of trying to find the big turkey. We couldn’t even get the big turkey at the meat market, even though we ordered it ahead of time, they said that there’s a limited number they could even get in.

Wayne Kay 07:32
Yes, same problem here. And that’s why they were running at $70.

But here, people feel it. They know what the situation is. But I got to tell you, the credit card bills haven’t even arrived yet. We got it maybe a couple of weeks until those credit card bills come in. So how can they look back and make things better or change things so they don’t have this Christmas debt hangover again?

Bonnie Hooley 07:55
I just want to say one thing about that. There’s a sort of an urban legend that when the Christmas bills come in, that’s what pushes people over the edge, and then they recognize the financial failures that have been creeping up over the year or two. 

But it doesn’t actually hit people as quickly as you would think, or as maybe it should. So even though the bills come in in January, February, the number of Bankruptcies that are filed statistically are not higher at that time of year. But it is a time to look at your bill and say, hey, do I regret the amount I spent on Christmas?

A lot of people are going to say yes, or if they have done some preemptive work, they’re going to go, no, this is exactly what I plan for. So the way that I would see to avoid the regret and the hangover is to plan ahead. It’s not like we don’t know Christmas is coming again. And so why panic and play catch up and spend it all in a month and then spend the rest of the year trying to catch up on what you did. Rather say, it’s coming next year, look at your bill and say, how much did I spend?

Do I like the Christmas I had? Do I want it to be bigger? Do I want it to be smaller? And then start planning for that a year ahead. Putting one 12th away, setting some realistic goals so that you can avoid impulse spending.

And the impulse spending is big. I know for myself, when I had more people to buy for at Christmas that were similar age to me, I would spend as much on myself as I would on them because they’re such great sales and if I bought them one, I had to get myself one. If you’re going to look ahead and build that into your plan, then that’s something you need to put into the plan, right?

Wayne Kay 09:44
So break it down, set up a limit right now and start saving that money somewhere separate. Even just pulling it right out of your bank will make a difference.

Put it in that Christmas envelope. Have you seen people do this? And how do they feel when they accomplish this goal?

Bonnie Hooley 10:03
I’ve seen people do it and I’ve done it myself. And when I started talking to people about budgeting, I decided to practice what I preached to see how difficult it would be for people and how people feel about it.

It’s a huge stress reliever because a small amount every month is not as hard to swallow as a big amount at the end of the year. And then what happens is when the end of the year comes and you pull out your Christmas envelope or if you put it into a separate account, you’re like, wow, I got all this money to spend on Christmas and I can afford to do all the things I like to do and I want to do. And you have a pressureless Christmas. 

So when the bills come in in January, you don’t have a debt hangover. Instead you’re just like, I’m a year ahead of the game, I can start pre planning for next year. So it’s a real stress reliever. And Christmas has enough stress with family drama and expectations that getting rid of the financial stress that causes the debt hangover is a really good way to go.

Wayne Kay 11:08
One year, I actually made it a goal to have all my Christmas shopping done by October 31.

Bonnie Hooley 11:15
Yes, a good goal.

Wayne Kay 11:16
It was the best year because I had zero stress. I just had to help with decorating and all that fun stuff, but I didn’t have to worry about going out to buy anything. And I buy everything locally. I have to find everything locally. 

And what I find that happens when you make it a goal and you’re thinking about the next year is you can find stuff on super sale or clearance items that you know somebody’s going to love. And so I end up saving a pile of money by buying it so far ahead.

Bonnie Hooley 11:49
Yes, because you’re not waiting for what they call the Boxing Day sales early or the Black Friday sales that aren’t always as good a sale as what you might find buying the same product in January or February, because that’s sometimes when the real sales are on. 

And so making your list ahead of time, checking it twice and preparing ahead is fantastic. I know when I was newly married, I would also sometimes start on Boxing Day planning for next year and seeing what kind of sales were out there.

Wayne Kay 12:21
Yes. I don’t know. It was just such a relief feeling to actually get it all done and then not have to, the ultimate goal is to not have a credit card bill come in in January. Regarding Christmas, I want to be able to pay for it all ahead of time. And we always went small for Christmas. We never went big for any gifts. So that’s what our budget was when our kids were little.

Remember back in the day when we were living, not paycheque to paycheque, but paycheque or to a couple of days before paycheque. And so this really is a prime topic for so many people out there that understand and go through that and you can actually do it. Don’t spend big money. Just find some great gifts, little gifts.

Bonnie Hooley 13:07
Yes. And the other thing that you can do to be generous is look for creative ways to do Christmas generosity without buying something. Because things that you can give that are more valuable than anything in your wallet are things like your time, planning to visit somebody or baking with somebody or taking them out for a walk. 

Or another thing is using your talents, you know, going out caroling or depending what talents you have for making crafts or cards or something like that. Those things seem to have more value to people than anything you could buy at the store. And encouraging people, even just writing out cards that have really positive messages in them that costs you almost nothing, and yet it’s going to be remembered by the people much longer than anything you spent all year planning and saving for.

Wayne Kay 14:02
Yes, my kids both ended up buying houses in the last year. And so being the financially responsible dad, I’m like, there is absolutely no way you guys are spending money on Christmas gifts for us. So here’s what I want. I want books. I want you to go find me a book. It’s got to be under $20. That’s your mission.

Bonnie Hooley 14:26
Perfect.

Wayne Kay 14:26
So my daughter in law – we’re opening gifts on Christmas and she said, I absolutely loved doing the book idea, and I want to do this every year because I had so much fun trying to figure out what would be a great book for each of you. So they were in for, like, what, $60 for all of us? And, yeah, it was awesome.

Bonnie Hooley 14:48
Yes, I mean, she had more fun with her Christmas, less stress. I’m sure that, you know, because she was so focused on what she had to get then it’s a much more memorable gift.

And now you’ve set a new tradition. So, I mean, you’ve done a triple whammy bang and saved a bucket of money.

Wayne Kay 15:07
And I have a whole bunch of books to read right through the whole year.

Bonnie Hooley 15:13
Cold winter months ahead.

Wayne Kay 15:15
Exactly. All right, any final words we need to know regarding tips for avoiding that Christmas debt hangover?

Bonnie Hooley 15:22
I think the biggest tip that I can give is just to plan ahead and don’t cave to social pressures and think about what’s important to you and figure out affordable and meaningful ways to make that happen.

Wayne Kay 15:37
Terrific. Bonnie, thank you very much for being on the show.

Bonnie Hooley 15:40
All right. Thanks for having me, Wayne.

Wayne Kay 15:42
My guest today, Bonnie Hooley. You can learn more or schedule that free consultation with LCTaylor Licensed Insolvency Trustee, by going to their website, lctaylor.com. 

And that’s it for the DebtMatters podcast. Make sure you subscribe wherever you get your favorite podcast from. And of course, for more information, you can always check out debtmatters.ca. Thanks for listening.