A merry Christmas shouldn’t depend on how much money you spend. But if you are someone who is obsessed with picking up the perfect gift for family and friends, feeding and entertaining them – it can often mean facing tough credit card debt in the New Year.
If the holiday season is something you haven’t budgeted for in the past, maybe it’s time to get ahead of next year’s gift buying by starting early. In today’s podcast, Licensed Insolvency Trustee, Derek Chase talks about avoiding Christmas credit card debt.
Derek also covers the following topics:
- Breaking the cycle of big gift giving
- Changing your mindset – focusing on experiences and relationships
- Budgeting for Christmas 2023
- Using your circle of influences to come up with new ideas
- Having conversations about what is important and realistic
- Advice for better finances for the year ahead
Looking for the best financial advice? Look no further than a Licensed Insolvency Trustee in your area. With their extensive knowledge of financial services you can be assured that you are getting the best qualified advice.
Read the Transcript
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, and in today’s show, we’re going to talk about how to celebrate a credit free holiday. You know, it’s so expensive this time of year, how do you end up avoiding having those huge credit card bills in January? And if it’s too difficult, who can help you? We’re going to come up with maybe some ideas as well to help reduce the cost of the holiday season.
My guest today, Derek Chase. From Derek L. Chase & Associates Ltd. Licensed Insolvency Trustee serving Vancouver Island, Sunshine Coast of BC and the BC north coast. Hi, Derek.
Derek Chase 00:49
Hi, Wayne. How are you doing today?
Wayne Kay 00:51
Doing great, thanks very much. How are you doing?
Derek Chase 00:53
Wayne Kay 00:54
We’re recording this just before heading into the Christmas break. And how are you doing? You got it all planned and ready?
Derek Chase 01:03
We do. Glad to say that we’re well in control this time around and thankful to have learned from the past and able to be more in control now.
Wayne Kay 01:14
Okay, that’s good to know. So you normally teach it, you live it.
Derek Chase 01:19
That would be hypocritical otherwise.
Wayne Kay 01:23
Well, I think it’s just one of those things that Christmas comes along. We can even say it’s not just Christmas, but other holidays as well that come up where you know you’re going to be spending a lot of money on birthdays. A lot of people love to spend money on birthday gifts and Christmas gifts. Is there any way to break this cycle of the big gifts?
Derek Chase 01:47
I think there is, and I think it comes down to the difference between what we all experience in a ‘regular month’ versus what might be irregular situations that come up once a year or just randomly.
And I could add another example to your list there of let’s say that you knew that you were going to go to a couple of weddings or some sort of reunion in the summertime. Well, that’s on the horizon. So it’s no different than a Christmas holiday season or birthdays coming around once a year.
It’s just not just not in our normal flow of our every day. And that causes some troubles, I think.
Wayne Kay 02:28
Right. And when we don’t have the extra cash, where do we go? Credit cards, right?
Derek Chase 02:35
Yes. There’s no doubt that I mean, it’s easy to see the numbers that get posted all the time about how many billions of dollars are in credit card debt and how it changes over the Christmas season. And, yes, it’s easy to put on plastic. That’s what it comes down to. It’s just easy.
Wayne Kay 02:55
Yes. Is there any way to avoid that?
Derek Chase 02:58
Well, I think so. You know, I think that if you start to have a different mindset about it, particularly about the Christmas season, you can avoid running up huge credit card bills that you’re going to face in January or February. And I think the mindset switches to not focus so much on stuff, but to focus more on experiences and relationships and just the type of things that you might want to buy.
And there’s a lot of pressure out there just to be better than the Joneses sort of thing and maybe a bit of gift competition within the family or within broken families from different parent sides of the parenting.
In our little circle, we’ve changed to have a rule or a suggestion that we want to focus on things that we can either eat or wear and that narrows down the gift giving and provides something useful for the person going forward.
Wayne Kay 04:02
Good thinking. I know for us, when our kids were small, we didn’t go crazy with expensive gifts, but we always had a great time. But so many people just go, they spend, spend, spend, spend with these extravagant gifts, then they’re paying for it in January, February, March.
Derek Chase 04:22
Well, I mean, good on them if they can afford it and that’s what they choose to do. It is bad news if you have to finance that at 29% interest on your credit card. That’s certainly not wise. You know, marketing firms are no dummies there.
They understand how to push your button so that you should get this sparkly thing or this other piece of plastic or something like that. And does it last for more than a short while? Probably not. As a result, you just become a prisoner to your credit card going into the future for a short moment of unwrapping.
Wayne Kay 05:01
And there’s nothing worse than when that envelope shows up on the 20th or 21 January and you’re like, oh no, how do I deal with this?
So the reason we do this show is to help Canadians with their financial, find some solutions for them, especially when there’s debt that people are carrying. And that’s why we’re talking about this, because it is so relevant that so many people get wrapped up in the spending side of things. So who can help with this? I know you obviously have some great ideas around learning how to budget.
Derek Chase 05:34
Well, there’s a lot of people that can help and there’s a couple of different angles to that question. If you’re already facing a big heavy debt load and there’s no way you can get out from under it, then I need to talk to myself or one of my colleagues across the country. A Licensed Insolvency Trustee can give you some information and feedback as to how to deal with that mountain of debt.
If we’re just talking about helping with not Christmas 2022, but 2023, then that’s a different perspective. And I think there’s a lot of different groups that can help with that. You know, first you want to start with your immediate family, but there can be other groups, such as if you’re on a team or if you’re in some sort of social running club or something like that, and you want to have some fun over the holidays but not spend like crazy.
Well, you can brainstorm with that group, and particularly for the family, I think it’s good to make it a teaching moment about it’s a teaching opportunity about how you can control that, because then you’re talking some powerful stuff because that potentially passes from generation to generation, and it’s got some legacy there. But to have the potluck dinner or to have the gift exchange with a certain price limit on it, those are all fun things to do that don’t necessarily require thousands of dollars of credit to be implemented.
So there’s different groups of people, I think. Look to your circle of influence, whether it’s the curling club or your friends or your teammates or your church or all those different ways can be helpful, I think, for those types of fun activities, ideas at not a huge price.
And I also add to that you don’t want to wait until December the 15th to start working on that. As you know, it’s going to be there a year from now, so maybe next fall, start putting out the contact feelers to see who wants to get together sort of thing.
Wayne Kay 07:55
Right. So as we probably fall into the same habits year after year, I don’t know if that’s a generalization, but I know we probably did as well. It’s not like we saved up for Christmas while my wife was actually pretty good at that, but different things that come up throughout the year.
And as you mentioned, you have weddings, you have reunions. I’ve got a reunion this summer. How do we break the cycle and change our spending habits?
Derek Chase 08:31
Yes, that’s a good question. I think it can go pretty deep on that question because there are situations where people will spend in order to feel better. And why do you need to feel better? That’s a counseling issue that can go beyond our podcast here today.
But changing in general, changing your mindset, I guess maturing, really, and having those discussions. I don’t want to put you on the spot here, but if you said, what’s your most memorable present? Looking back for me, it’s actually things that people have made for me that I still have, and I can say, oh, I know so and so made that for me, and it kind of sticks with me, as opposed to the piece of plastic like I mentioned or something that’s more temporary, right?
Wayne Kay 09:26
Yes, I talk about that all the time because it’s like somebody made it with care. They took the time. They’re making this salsa or whatever it is. I love getting gifts that are homemade like that. Now at the Painted Rock, I’ve told my kids, I don’t want that, so make me something awesome.
Derek Chase 09:46
Yes, there can be some bad ones.
Wayne Kay 09:49
Too, but they just laugh. It’s all good. We have the same sense of humor.
So it’s fine, but I bring it up because it can be difficult. One person in a relationship grew up not having a big Christmas but had a lot of fun together. There were a lot of games at Christmas. I remember going to my grandparents house and we would decorate the tree when we all showed up on Christmas Eve. That’s when we do the decorating and then we have this great feast and then I don’t remember one gift.
I know we got something, but I have no recollection of any gifts. But I remember all the people, the aunts, the uncles, my cousins, all of us having the best time ever.
Derek Chase 10:28
Yeah, that’s a great tradition. And just to be around doing something, decorating the tree, that’s fantastic. It’s a good one to pass along, but I guess it gets down to communication within the household or the relationship about what’s important to each other, what do we need to do versus what do we want to do?
You know, how much are we prepared to spend this month so that we can keep things on the rails and go into 2023 of the new year in good shape as opposed to, you know, trying to play catch up already.
So it’s got to come down to communicating and talking about what’s important and what we can expect from the people that are around us because certainly there can be a lot of disappointment if someone’s expecting the big spend and they don’t get it and there’s problems that way. But yes, I would just say you have to talk about it and talk about it before Christmas Eve sort of thing.
Wayne Kay 11:30
Yes, but some people, they love to spend and I’m sure you have these people in your office, they come in because all of a sudden somebody’s in a financial bind and you have to have the conversation – one was raised one way, one was raised another way. It must be very difficult to merge finances and to merge the way you were thinking of spending on these occasions.
Derek Chase 12:00
Yeah, it certainly is an issue. And whenever we’re helping people, if it happens to be a couple, when we do the two financial counseling sessions, we have some exercises that we like to work through where to help them start to build some communication as far as their future financial decisions go. And it can be quite interesting when you understand that one person, it’s really important to them to save some money and the other person could care less and they would rather travel or go some or do other spending. So it’s important even just to have the communication and then it deflates the pressure and it just is really healthy. It’s a healthy thing to do.
And as I was thinking, there’s other parts of the holidays that get you as well on the expenses and thinking of the cost to travel. And we were talking about just a basic cost to travel off of Vancouver Island. It’s expensive to take the ferry, to get a hotel, that sort of thing. You got travel involved with the holidays, you got the presents, you got the food, and then you whack inflation on top of all those things, and it’s a heavy punch to take.
Wayne Kay 13:22
Absolutely. It’s $200 there and back, I think, to get off the island and, and then, you know, I don’t know what’s happened in the hotel industry. They’re so expensive now compared to what they were a couple of years ago. So now you’re paying two, three, $400, and then all of a sudden you get stuck in a British Columbia snowstorm and you get another extra day stuck in a hotel.
So you’re right, there’s a lot of expenses that come up. Let’s look ahead into 2023, give us some advice on how we can be in a better position at the end of 2023 than we are right now.
Derek Chase 14:03
Well, I think it’s always good to set New Year’s resolutions, even if they don’t always pan out. I think it’s good to keep trying. And it’s almost like a broken record to say that you have to know where you’re spending your money, and just would encourage people to put that as a goal to just track, even if they’re just tracking their food expense.
But to know exactly what that is from month to month is a very useful piece of information to work with. But if you can track what your expenses are going, that’s one way to be better off in the New Year.
I think a second way would be to save something each month, even if it’s just super small. If you’re struggling with debts and you’re saying, there’s no way I can save, we’ll save a toonie every month, make it so small you think it’s never going to help at all. And by fast forwarding twelve months, if you’ve done that, if you’ve saved, whatever, $5 or $10 a month, and you’ve tracked your expenses, I can almost guarantee you’ll be better off in twelve months.
Wayne Kay 15:18
Yes. Wonderful information. We just need to be better. I’m always trying to learn, and I love this show because I get to learn from you and find out ways we can always be better. And I think when you get around those like minded people who are feeling the same way.
I think everybody feels the crunch these days, if you get around everybody feeling the same way, you can come up with new, new traditions that aren’t going to make the holidays any less by any stretch of the imagination. In fact, they might even make it better.
Derek Chase 15:51
Yes, I agree. Try something new. If the qualifications are that you don’t have to spend a lot to do it, then there you go. It could be a brand new tradition, which could be fantastic.
Wayne Kay 16:01
Absolutely. All right, any final words you need to pass along regarding today’s topic?
Derek Chase 16:06
It’s a great time of the year. I wish everyone would enjoy it, especially right now. We’re looking very white and bright here and just wishing everyone the best for the holiday season and a healthy and happy New Year.
Wayne Kay 16:20
Derek, to you and your family as well.Thank you very much for your time today.
Derek Chase 16:24
You’re more than welcome.
Wayne Kay 16:26
Well, my guest today again was Derek Chase. You can learn more or schedule that free consultation with Derek and his team at bankruptcytrusteebc.ca.
That is it for today’s Debt Matters podcast. Make sure you subscribe wherever you get your favorite podcast from. And of course if you want more information, you can always check out our website, debtmatters.ca. Thanks for listening.
About Derek Chase
Derek Chase is a Licensed Insolvency Trustee in British Columbia. He has been helping individuals and corporations restructure their debt since 1997. His areas of practice include personal and corporate insolvency including Consumer Proposals and Bankruptcy. The best part of his work is to be able to witness lives change for the better when the heavy burden of unmanageable debt is lifted.