Mental health & credit-card debt during the holidays

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By Eva Wong

Special to the Financial Independence Hub

It’s the most wonderful time of the year and many of us celebrate by making purchases for our loved ones. Sometimes lots of purchases.

We at Borrowell paused to consider how this time of year might make Canadians in debt feel.

Earlier this year, a survey we commissioned found that 58% of Canadians have carried or are currently carrying a balance on their credit card. That doesn’t include other forms of debt, like student loans, lines of credit, car loans or mortgages. When you factor in that the average consumer owes just over $22,000 in debt in 2015, not including mortgages, we wondered why no one was addressing how Canadians juggle the expectations of holiday shopping with the realities of their debt.

Dr. Oren Amitay, a noted Toronto psychologist, told us the holiday shopping season is a time of year that can cause emotional and psychological distress for people who are in the red.

Financial pressure takes its toll

“A lot of people try to ignore their debt by doing things like not opening their bills,” explains Dr. Amitay. “But you can’t run from it at holiday time. Not only does the holiday shopping season highlight the debt you’re already in, but you know you’re about to get further into debt to live up to perceived expectations.”

Dr. Amitay says when the pressure is on to make even more purchases, those in debt can experience a range of symptoms.

“The emotional/psychological consequences can be anxiety, depression, guilt, embarrassment, resentment, hopelessness and social isolation” he says. “Insomnia and disturbed sleep are common physical symptoms, as well.”

Given that Canadian debt levels are increasing, we wondered if the good doctor had noticed more of his patients wanting to talk about their financial worries.

“I would say I’m seeing more patients in debt because social media is putting it in everyone’s face,” Dr. Amitay told us. “It’s hard enough to keep up with the Joneses, let alone the Kardashians.”

Dr. Amitay says the most important piece of advice he can give is to set healthy boundaries.

“If the financial pressure is getting to you, talk to the people in your life. Put limits on perceived expectations, in yourself and the people you love. It’s a hard discussion but it’s worth it.”

In some ways, you can think of spending a bit like drinking- it’s okay when done in moderation! Here are our three tips to get through this holiday season:

3 tips to curb holiday spending

1.) Make a special holiday budget – plan in advance what you’ll spend on gifts, travel and going out.

2.) Only spend what you have – don’t go into debt. It’s not worth the guilt you’ll feel!

3.) If you’re carrying a balance on your credit card, see whether you could get a lower interest rate somewhere else.  With Borrowell it takes only a minute and it won’t affect your credit score.

Eva Wong is Co-founder and COO of Borrowell, a fintech lender that offers fast, fair, and friendly personal loans, and provides Equifax credit scores for free. With a background in management consulting and business development, she has worked at Maple Leaf Foods, Oliver Wyman and a number of not-for-profit organizations. Eva has degrees from Queen’s School of Business and Harvard University. She enjoys food blogs and baking projects with her two kids.

 

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