Cash is king to control your budget for gifts

Q: Last year at this time, I was in a similar situation: I am paying off the previous year and the year previous to that, Christmas spending. As soon as I get a handle on my debts, Christmas is here again. How do I get off this vicious circle?


A: The "Wheel of Debt" is a continuous circle that appears to have no end. Life has many paths and individuals can choose to stay on the path to more debt or choose a different path. Gift giving should bring joy, not sorrow for the next year or more.

First and foremost (for illustration purposes):

  • Identify the problem: Spending more than anticipated on credit card.

  • List alternatives to resolve the problem: Reduce credit-card use, eliminate credit-card use, use only cash.

  • Act on the best alternative: Use only cash.

Christmas comes the same time of every year. Treat Christmas like any other project that requires significant spending such as buying a new car, a new home, or major home repair: Plan a Christmas budget.

A budget forces you to determine how much you can afford to spend and the discipline to stick within your budget. At right is a sample Christmas budget that you can alter as you see fit. All costs must include presents for PM Harper (6 per cent) and Premier McGuinty (8 per cent).

Here are few Dos and Don’ts:

  • Do give to charity, if you are able.

  • Don’t wait last-minute to shop.

  • Do have patience with other shoppers, drivers and staffers.

  • Don’t get into debt because of Christmas.

  • Do something because you want to, not because you think you have to.

  • Don’t drink and drive.

Have a joyous holiday and a wonderful New Year!

Henry Choo Chong, CGA provides accounting and tax services to individuals and businesses in the GTA. He can be reached at 416-590-1728, ext. 304. Any questions to Money Matters should be e-mailed to

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