Don't go into debt this holiday season: 7 tips

There are only a few more paydays left until Christmas, and if you haven't set a budget for the holidays it's not too late, according to Charlottetown financial adviser ShannonMcNutt.

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McNutt offered a seminar last week at the Stratford Public Library on budgeting for the holidays, and she agreed to share her tips with CBC News.

Planning ahead and really saving might take a full year. Shannon McNutt, financial adviser

"I think a lot of people overdo it during the Christmas holidays," McNutt said. "We often don't see them until afterwards, and we kind of see the after-effect when they come in in February and March and they're struggling to pay off what they've spent."

"It'd be great to see them before, because we could give them the right advice," she said.

Here's that advice now, before you become one of McNutt's "them."

1. Make your list & check it twice

"Budgeting is all about planning," she said. Set out specific goals for your spending, and a date to have that money by.

If you don't have enough money to cover gifts and other holidayspending, McNutt said, you have two choices: figure out a way to make more moneyor reduce your spending limit.

If you haven't already, you may need to figure out how much you spend on your monthly expenses such as food and rent/mortgage to decide how much you can afford to spend on gifts and other holiday spending.

2. Stick to it

"Everybody wants to holidays to be as spectacular as possible," McNutt explains of why people stray from their goals. Marketing plays a role too, she notes.

People want to be able to give their children expensive toys, but McNutt explains it might not be in their best interests.

"What kind of long-term effects is that going to have on you financially, and ultimately your family? If you're not putting away for your retirement then maybe your children are going to have to pick up the slack when you're 65, 70 and can't pay your rent."

3. Use cash

Using cash instead of credit or debit can make you more conscious of how much you're spending. When the cash is gone, you know it's time to stop.

4. Put money aside

Many people in the past have used Canada Savings Bonds as a "sock" for their Christmas spending money.

"We would always recommend a tax-free savings account," said McNutt. It earns tax-free interest and is less accessible than other accounts, because there is no debit card available.

5. Start early next year

"Planning ahead and really saving might take a full year," McNutt points out.

If Christmas spending is important to you, begin budgeting and setting money aside at the beginning of the new year. You can even begin buying gifts, checking one or two off monthly, and hitting up sales when they're on during the year.

6. Remember what's important

McNutt is an advocate for shopping second-hand "and being realistic," to stay out of the red, she said remember what's important about the season besides giving the perfect gift.

"Christmas for us is more about food and family, and it's really important for my children to grow up that way," she said.

7. A few more things

If you're shopping online remember to first search for discount codes from that retailer one site to checkis RetailMeNot.

• 5 DIY Christmas gifts to make now

Get a jump on your holiday baking and freeze it now. Home economist Margaret Prouse is holding a class called Festive Dishes to Make Ahead Nov. 22 at the Milton Community Hall at 6:30 p.m. It's free for Miltonvale Park residents aged 50 and up and others can pay by donation.Register ahead at (902) 368-3090 or by emailing admin@miltonvalepark.com.

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