The holiday season is a time for joy and celebration. Yet for many, it can also bring financial stress. In this episode, debt expert Matt Fader discusses how to avoid the common pitfalls of holiday overspending. From budgeting for predictable holiday expenses to setting realistic expectations for gift-giving, discover how you can manage the financial pressure of the season.
Key Points Discussed:
- Holiday shopping norms: Dive into the commercial pressures that encourage overspending during the holidays.
- Holiday budgeting tips: Learn practical strategies for saving and seasonal preparation.
- Managing holiday expectations: Explore healthy holiday boundaries with family and friends to help limit financial strain.
- Spending impact: Find out how to prevent carrying debt into the new year.
Matt also provides insights on how to make holiday memories meaningful—without focusing on material items. Ensure that the season is about experiences, not expenses.
Read the Transcript
Wayne Kay 00:04
The holiday season’s coming. Today’s show all about how to avoid debt and enjoy a stress free holiday. 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. And in coming up in today’s show, we’re going to talk about that holiday season.
How do you manage expectations? How do you save? What’s the impact of maybe going overboard? And what you do now is going to affect you in the future. So be aware of that.
My guest today is Matt Fader from Allan Marshall & Associates Licensed Insolvency Trustee. Matt, thanks for coming on the show.
Matthew Fader 00:44
Good day, Wayne, how are you?
Wayne Kay 00:45
Hey, I’m doing pretty good. How are you doing?
Matthew Fader 00:48
I’m do, if I were any better, I’d be suspicious.
Wayne Kay 00:53
Here we are going to be talking about the thing that happens every single year and the thing that people go into debts every single year for, and that is Christmas.
Matthew Fader 01:06
Yeah, fun times.
Wayne Kay 01:09
We were just talking before we got into actually recording this show. We’re saying it’s unbelievable how much money people feel that they need to spend when they don’t have it.
Matthew Fader 01:22
Well, yeah, most definitely. I mean, one of your problems is people don’t even realize that they don’t have it because we do exist in that sort of get it now, worry about it later type of environment. So you will tend to notice a few months before Christmas builds up, the advertising for some of your secondary types of lenders may step up. You’ll hear more ads on the radio, things like that, encouraging people to come in and be like, hey, you know, come on in and get a loan or do whatever it is. And that’ll start to ramp up around a few months before Christmas time so that they can say, hey, you know, give, give your family the Christmas of their dreams.
Buy them all a bunch of stuff that they’ll love for 20 minutes and then spend the next 30 years paying for it. Not quite that bad, but, you know, it is definitely geared, it’s very commercial time. There’s a lot of money to be made, and it’s a good time for lenders to make some money off people. But, yeah, it’s really easy to lose your perspective and your objectivity.
Wayne Kay 02:32
I was going to mention that I actually, one of the first times I actually saw this, I was at some of one of the big stores, a big mall somewhere, and one guy was talking to somebody else, which I overheard this conversation. He was saying that he’d spent like $5,000 at Christmas, and he didn’t know how he was going to pay for it all now. And I was like, mortified. I’m like, five grand. Holy. What the heck? Did you.
Matthew Fader 02:57
I believe it.
Wayne Kay 02:58
Really? That’s shocking to me. I guess we’ve never gone crazy with, with Christmas.
And now my concern is always for my kids trying to buy me gifts because I’m very needy. I tell them I want really big gifts. No. And then I say, no, no, let’s do books or let’s do something else. And I’m trying to keep everybody spending down. So it’s more about the experience, but when you got kids, you want to spoil them.
Matthew Fader 03:23
And I think that’s part of it most definitely. There’s the perception. The idea of saying this small human is going to go talk to their small humans and they’re going to compare notes and things like that. So there is that perception of saying you want to make sure that you’re coming off looking well to the neighbors, which is a thing, you know, but I often think about, and I don’t think we get sued or talking about her or anything like that.
But if you remember when Dudley Dursley had his birthday and he’s like, there’s 14 presents here. There were 13 last year, or whatever it is, that’s a Harry Potter reference, that perception. This is what it is. And one of the really, really concerning things is, you know, and this is very generational, you know, like, like my mom grew up one of 19 kids or, sorry, one of 17 by the time because of whatever, but, you know. Oh, yeah. French Acadian Catholic.
Wayne Kay 04:40
Right.
Matthew Fader 04:40
I mean, I won’t get into the birth control beliefs and free labor or anything like that. But, but, you know, I mean, lots of kids and what did they get for Christmas? They got like an orange.
Wayne Kay 04:50
Yes, exactly.
Matthew Fader 04:52
Right? Yeah. And that’s what they had. Now, I’m pretty sure that if you, you know, it’s not like Christmas story where, you know, Ralphie’s getting his Red Rider BB gun.
Right. But, you know, there is that there, there’s that experience. There’s that thing that I find that when my parents got to say that they had their kids and they came from a generation that had enough but always felt like it, you know, like you hear the stories. It’s like, well, we were poor, but we always had enough. We were without, but we always had enough.
And then when you go to the generational, like myself growing up in the seventies and eighties, not to really age myself, born in 77. So I really don’t remember a lot of the seventies, but I mean, I had, you know, Christmas where it’s like, oh, great, here’s the millennium Falcon or here’s, you know, these, these big brand name toys. And it sets that expectation. My parents said we want to make sure our kids don’t go without. So they set that expectation.
I would have to admit, and I would admit that I am guilty of doing it. To say that when Christmas would roll, would roll around, that I would become guilty of saying, I’m going to overindulge and I’m going to try to really spoil this magical little human so that they can have the best experience possible. Now, a lot of that is me trying to project my own experience on them. But what am I building for the expectation for them as they carry this forward? And that’s what Christmas, a lot of times has become, has been that anticipation or the expectation of if I walk in and there’s three things under the tree, Christmas is going to blow.
There has to be a hundred things under there, and it has to be this production, and it has to be whatever. And don’t get me wrong, a thoughtful gift. I gave a Christmas gift last year. It took me about 5 hours to do the wrapping on it because I put so much thought into the wrapping or whatever. At the end of the day, it got ripped open.
Wayne Kay 07:03
Yeah.
Matthew Fader 07:03
Kid doesn’t care what the wrapping looks like.
Wayne Kay 07:06
Well, how do you go about maintaining those expectations?
Matthew Fader 07:11
Do you set them low? I guess, you know, like. Or you set them realistic?
Wayne Kay 07:16
I think you just have fun. I think you have fun at Christmas. And my son laughed so hard one time because, you know, we’d like our little nacho chips and we, under the tree, we put a bunch of bags of Doritos and, you know, some of that cheese stuff that gave him heart disease by the age of six and which I still love that cheese, by the way.
Matthew Fader 07:37
Oh, yeah.
Wayne Kay 07:37
And he laughed so hard. And I still remember him laughing. It was like, this is all yours, son.
Have at her. Right. It was just a fun little gift, but I just remember him laughing so much. So.
Matthew Fader 07:50
And those are the experiences, right? That’s what you’re gonna get, you know, over, over saying, I got, you know, the, the cabbage patch kid or whatever the current equivalent of it is that.
Wayne Kay 08:02
We still had to get him other things as well. That’s not all we got. Sure, but so now here we are. We’re, you know, we’re out a few months here from Christmas.
How do we start the whole saving process? How do you like to budget that? When you talk to, it’s a little.
Matthew Fader 08:16
Late to start now to say, oh, here we are in September or October saying, let’s start saving for Christmas. So it is a predictable expense.
It does find it should find its way into your regular monthly budget so that a small portion of your revenue or your income is being allocated based on a realistic amount that you wanna spend a part of the problem of course, with Christmas is, yes, we tend to get overhand, yes, kids have huge demands or, and they don’t understand the value of a dollar, you know, so when a kid’s like, well, I want an Xbox and a PlayStation, you’re like, oh, man, that’s a lot of cash for me to be thrown. Yeah, exactly. Me too, you know. Yeah, yeah, exactly. So.
But you know, it is managing that expectation and there are people, and I do know what happens. I know people will save up money and they’ll buy things throughout the run of the year and they’ll say, okay, little things here or there and they forget what they’ve bought. They tend to overspend. They see something that’s on sale because sales are a trap, of course, to try and get people to spend money on areas that they don’t want to. And it is really very much that managing of expectations.
I’m certainly not going to say when those sneakers go on sale and you know, you got to buy your kids sneakers as one of those boring gifts or socks or underwear or whatever it is. Yes, you buy those when they’re on sale, but when it comes to those larger ticket items, kids minds change pretty quick. And what was. Well, when you thought, hey, I’ll buy this hot thing six months ago and I’ll overpay for it because it’s the hot thing now. You try and put it away for Christmas, by the time Christmas rolls around is not cool anymore.
And then you get disappointment and whatever, but you overspent on something, you held back on it to say, now we’re going to have this magical experience for it. And time kind of wrecked it on you. That kind of stuff happens, or so I’m told. I don’t know. Okay.
Wayne Kay 10:22
It’d be so disappointing. I kind of do like that idea, like, but I often. What I would do every once in a while is I would make it a little challenge to get all my Christmas shopping done by end of October. So then November, December. There’s no pressure.
I’m just living life. But I don’t have a lot of gifts to buy in anyway. In all honesty, no. Right. So it’s okay for me, but there’s a lot of people.
December comes in. Good grief, it’s such an expensive month.
Matthew Fader 10:49
Oh, thank God for Amazon, right? Like, I don’t even have to leave my house anymore. I’ll just overpay on delivery and everything else.
Wayne Kay 10:55
But is that a bad thing?
Matthew Fader 10:56
Thing?
Wayne Kay 10:56
Is that, do you think that’s a bad thing now that we can now just buy things while at night?
Matthew Fader 11:02
It’s never. Being able to buy things at 02:00 in the morning while you’re sitting on the toilet is never right.
You know what I mean? Because you, we are so subject to be able to give it an impulse these days that it really does lend itself to overspending.
Wayne Kay 11:20
Because my wife works at a post office and she said the amount of Amazon packages would blow your mind and the amount of people that come day after day after day after day picking up these packages. Shocking.
Matthew Fader 11:34
Well, yeah, and, you know, in some cases, it’s the only way to do it. I mean, like, if I’m going to buy Lego, I buy it off the Lego store. It comes to live delivery is huge. It’s convenient. Yes, it’s great. But there’s this, there’s this thing that really is lacking in the fact of, you know, of course, spending digital money is dangerous.
You know, I am very much a proponent of physical money. I like cash. I like to have a pile of cash in my hand because when I have a pile of cash in my hand, I am more likely to hang on to it because when I have to give you half, I want to give you half. I worked hard to have this pile of cash. I want to give you idea of it.
It’s mine. But I seem to have no problem in tapping my cardinal and having that same equivalent or more leave. And because I’m removed from that experience of actually handing over the physical cash and being able to watch it, it becomes more dangerous for me to then tap again and to tap again and to tap again because I’m losing, I’ve lost that connection to say what I’m, what I’m paying, you know, I’m losing, I’m losing track. I’m getting into severe overspending. And again, when we get wrapped up in that air quotes, you can’t see it because this is audio, but I’m making air quotes.
That Christmas spirit of being full of joy and giving and all that other stuff. Yeah, it’s great to get caught up in that crap. And I say crap sarcastically, it’s great. To have that kind of thing. But at the same time, what is the consequence of that action?
Yeah, it feels great for that 30 seconds that we’re on there. But holy crap, I got to pay for this for the next nine months.
Wayne Kay 13:19
So the things we’re doing today, right. Is what you’re telling me. The things we do today affect that, obviously.
So absolutely. That’s gonna hurt you in the future and then it’s harder to build the savings for the next year.
Matthew Fader 13:32
Yeah. Because you’re still paying for what it is that you got last year. And, oh, it’ll be nice and easy.
Even when you go on Amazon now, it’s like, oh, you know, do you want to finance it for twelve months or whatever it is? It’ll only be this much and all of this much. Well, yeah, you know, easy payments get tough. How do you have enough of them?
Wayne Kay 13:53
How do, how do you, as I was saying that basically our whole world these days seems to be on monthly payment. Nobody even talks about what something’s going to cost. It’s how much it is per month. And if you have an extra dollar back left, well, you can spend ninety nine cents of that in another monthly payment. Mm hmm. Right.
That’s how we’ve become cars. They don’t even tell you what the price is. They just say, well, which, what payment do you want? And then they make the payment for 15 years and whatever it is. Right.
Eight years, nine years. I mean, it’s unbelievable. People don’t want to talk about that. Well, what is your advice regarding this? To have that stress free Christmas?
Matthew Fader 14:33
Well, you know, the advice again, is to make sure that expectations are maintained, that you’re not coming into a situation where, because we really fear disappointing the most important people in our lives. Right. And, you know, that’s what Christmas really rolls around to, is that Christmas morning of being able to have that quote, unquote, family time, if you’re lucky enough to have a family and to see everyone happy and to have that experience. And when you’re dealing with kids, they associate a lot of that with getting what they want. It’s not wrong of them to do that.
That’s their experience. But if you maintain unhealthy expectations, then you continue to have to raise that bar year after year after year, and that gets a lot more difficult. So a lot of it is in maintaining that expectation. Santa will bring you two presents. Mom will buy you one.
Granddad will buy you one. You’re going to have five things under the tree. And that expectation is there, there’s no let down to that. If the expectations are managed, maybe one or two sneak ones come in there just as a special surprise. But that allows you to maintain it, right.
And that allows you to be able to say, okay, we’ve set the bar. That allows me to stick to a budget that I’m not flying out of hand on saying, I have to top last year. I have to top last year. So a lot of it, I think, is maintaining those expectations, determining again what it is that you want to be able to spend a trying to save on a weekly or bi weekly or semi monthly or monthly basis. However it is you’re paid to take a small amount of your pay and setting it aside, setting aside specifically for Christmas.
So if you listen to goals one and identify goal, hey, Christmas is a goal. Let’s take dollar 25 a pay and throw it into that account. Because guess what we’ve done? If we have a Christmas account and we put money into there and we say we want to buy Christmas gifts, it comes out of the Christmas account because we’ve given ourselves permission to spend that money, right? And then I don’t have that anxiety.
I don’t have that fear. There are people that they dread it and they say, I get. I’m just a nod of fear as I’m watching people opening these things and I’m seeing the price tags over their head and what’s associated with that. Heartbreaking, isn’t it? Yeah. Now I got to get this.
Wayne Kay 17:00
Yeah.
Matthew Fader 17:01
Well, think about it. Wait, I got to get a third job to be able to pay for that Christmas. What’s the price of that?
Wayne Kay 17:06
I know.
Matthew Fader 17:07
That’s time away from your family.
Wayne Kay 17:08
Yeah.
Matthew Fader 17:09
You can’t get that back?
Wayne Kay 17:10
No, it’s gone. This is good, though, for everybody to be aware of it. I think we’ve just gone so over the top with what we do for these holidays. It’s good to have some reality before we get into the spending 1000%.
Matthew Fader 17:26
But again, it has to be on that, maintaining that those expectations save some room for birthdays and Easter and other things like that. You don’t have to go all out.
But again, it is, if we can save more throughout the year, if we can take a little bit, little pieces every week, every pay, every whatever it is, and we can allocate that, it’s going to reduce the stress. It’s going to allow you to sit there and enjoy the experience with your family. And the consequence of that is that you then have that experience. And much like your cheetos, right. That’s memory.
That’s an experience. That’s something that you’ll have forever. Nobody can take that away from you.
Wayne Kay 18:10
Yeah, exactly. Nice simple break.
Matthew Fader 18:13
Yeah. Yeah.
Wayne Kay 18:14
Hey. Well, this is fantastic. I’m sure happy you took time to chat with me on this topic. Anything final you want to share with us?
Matthew Fader 18:24
I don’t know how it. If. If we can. If we can lessen the burden, we don’t treat it like it’s an emergency. We understand it’s coming. We prepare for it, and we maintain those expectations.
Things are a little easier. And right now, everyone needs a little bit more easier in their lives. So we don’t need these things complicating it.
Wayne Kay 18:49
I love it, Matt. Thanks again. Have yourself a great one.
Matthew Fader 18:52
You too. Thanks, Wayne.
Wayne Kay 18:54
Well, my guest today, Matt Fader. And if you want to learn more, maybe you’re having a bad financial time and you need some help.
You can get a free consultation with Allan Marshall & Associates Licensed Insolvency Trustee. You can go to their website wecanhelp.ca. And that’s it for today’s Debt Matters podcast.
Make sure you subscribe wherever you get your favorite podcast from. And if you want more information, you can always check out debtmatters.ca. Thanks for listening.