With the holiday season fast approaching, many students are overspending on gifts and creating financial issues for themselves.
“If you don’t have a plan which limits your expenditure patterns, you’re likely to overindulge,” said Allan Bishop, an intermediate accounting professor at Humber College.
According to research by TD Canada Trust, 57 per cent of Canadians overindulge financially during the holiday season.
While researchers also found that 85 per cent of Canadians take advantage of sales and discounts and 70 per cent track their spending, only 58 per cent follow a budget.
Bishop said students should make budgets and set spending limits as preventative measures.
“If you have a plan with a limit that you can afford, you’ll be able to survive the holiday season without going broke,” said Bishop.
Some students know how stressful spending can get when buying for relatives.
“I always spend so much during the holidays because I buy gifts for my parents, my friends and my girlfriend,” said Rushawn Ettienne, 19, a Humber first-year electrical engineering student. “When the next month comes I go broke because I have to pay my credit card bill.”
According to some financial advisers, it can be helpful to treat yourself only after the holidays.
“When you go Christmas shopping for people, don’t buy anything for yourself,” said Colin Fitzsimons, a financial aid coordinator at the University of Guelph-Humber.
Fitzsimons said activities such as a secret-Santa gift exchange between friends and family, can limit spending a specific amount and only require buying a gift for one person.
“I have four daughters, and two of them are in university and their ability to buy gifts for their parents, sibling and friends is limited to the resources they have available,” said Bishop. “I think what’s important for students is that the thought counts more than what you buy. Even a thoughtful inexpensive gift is just as important as expensive and fancy.”
TD Canada Trust advises people to create a plan and start a budget now. The bank also suggests shopping early, tracking spending and watching for potential budget breakers while staying focused.