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By Tyler Thielmann, Spring Financial
Special to Financial Independence Hub
A recent survey from Canadian fintech company Spring Financial, found that nearly three quarters (74%) of respondents plan on reducing holiday spending this year and shoppers, particularly Gen Z (66%) and millennials (64%), are finding the financial strain of buying gifts to be the most stressful part of the holidays.
The economy has been challenging this year so it’s no surprise that shoppers are feeling added stress this holiday season. Whether you’ve already started your shopping or you haven’t even started your list, below are some practical holiday shopping tips to help make your spending less stressful and more manageable.
1.) Spread the joy of pre-loved items
This one might be easier said than done but with half of shoppers opting for gift alternatives, there’s a good chance your friends and family may be relieved about the idea of traditional gifts with more financially feasible alternatives. For example, places like Facebook marketplace often have gently-used children’s toys that offer a more budget-friendly price tag for the little ones on your list, while a traditional baking or book exchange can be a great alternative to Secret Santa games for the adults in your life.
2.) Set a budget and stick to it
It can be so easy to overspend during the holidays. There is always someone to shop for and shops — whether online or in-store — are set up in a way that encourages impulse buying and overspending. To set yourself up for success, set a budget and shopping plan before starting shopping to ensure you’re sticking to a spending limit that works for you. Don’t forget to account for all the extra expenses that come with this time of year like food, host gifts, and transportation to and from any holiday parties you have coming up.
3.) Compare your debt options
Sometimes, taking on a bit of debt is necessary to keep the holiday magic alive. The good news is, there are lots of financial options available to shoppers. Comparing the interest rates on any buy-now-pay-later programs as well as credit cards, lines of credit and loan is a great way to determine which debt option will be the easiest to pay off post-holidays.
4.) Prepare a payment plan
While over half of survey respondents plan on paying off holiday debt by the end of January, there are some shoppers that anticipate needing a full 12 months. Long-term debt repayments accrue more interest, increasing the total cost. Paying more than the minimum each month reduces both interest and overall debt.
The holidays can be a time of joy and connection, but they can also bring financial stress. By adopting smart holiday shopping practices you can enjoy the festive season without financial regret.
Tyler Thielmann is the President and CEO of Spring Financial, a leading Canadian fintech founded in 2014. Spring Financial was one of the first companies in Canada to integrate open banking tec hnology into its operations in 2015, and remains one of the largest users of this technology today. With nearly a decade at the helm of one of Canada’s largest online lending platforms, Thielmann has become a recognized authority in the field of online lending and lending technologies in Canada.
Consider doing a name draw within a large family and each person only buys one gift for one other person. Set a budget upper limit for everyone. Make it more about getting together than buying gifts for everyone. Get the commercial out of the holidays and focus on time spent with loved ones. Nobody should have to go into debt to meet a commercial lens expectation of the holidays.