Don’t let Christmas spending burn a ho- ho- hole in your wallet

Christmas is a time for celebration…and for some a year-end bonus. If you’re so lucky enough to get a bonus, what should you do with it?

Or, what shouldn’t you do with it?

“First of all, recognize that you’re really fortunate because not every person gets a year-end bonus,” says Karin Rimnyak, Investment Advisor with Action Financial Group, HollisWealth, a division of Industrial Alliance Securities Inc. and Insurance Advisor with Hollis Insurance in St. Thomas.

She suggests stepping back before spending it and considering how you can make the biggest financial impact with this “found money.

Christmas bonuses are great but take a deep breath and be responsible before spending it, advises Karin Rimnyak. GETTY IMAGES

“The second thing to recognize is you should really do the responsible thing. But to make that more palatable, keep a little bit of it for fun or to treat yourself,” says Rimnyak.

“Then take a deep breath and think about what is the responsible thing to do with this bonus,” she adds.

“We want people to avoid leveraging the bonus.”

Meaning: “Don’t use the bonus as a down payment for something that you really can’t afford in the first place that would lead to bigger financial problems or more debt in the future.”

So, what do you do?

“The best thing you can do is pay down your credit card debt and not run it up again,” says Rimnyak. “Instead of creating more debt you’re eliminating more debt, which is a bonus in itself.”

At Christmas time Rimnyak advises people against using their credit cards or overspending on gifts.

“Decide on a budget based on how much you are really able to, and prepared to, spend,” says Rimnyak. “Go to the bank and take the cash out and when the cash is gone, you’re done.”

What do you do if you don’t get a Christmas bonus?

For those who don’t get bonuses, consider putting a little bit of money aside each week and then using that money for Christmas spending – essentially, giving yourself a bonus, says Karin Rimnyak. GETTY IMAGES

“Put a little bit (of money) aside that you’re going to use for Christmas,” says Rimnyak. “Even if it’s an envelope you put $10 a week in, at the end of the year that’s $520.”

If you charge that “$520 (on your credit card) at a 20 per cent interest rate, over the course of the year it is going to cost you $600 to pay back.”

“If you’re not getting a bonus you have to create it yourself.”

For more information call 519-631-4724, visit the website or find them under Action Financial Group on Facebook.

Action Financial Group, HollisWealth in St. Thomas is a team of investment advisers who have been offering solid financial advice as well as investment products and services for more than 23 years. Financial services include investment, retirement planning, income tax planning and much more.

Karin Rimnyak, CFP® is an investment advisor for HollisWealth®. Opinions expressed in this article are those of the Investment Advisor only and do not necessarily reflect those of HollisWealth®. Holliswealth® is a division of Industrial Alliance Securities Inc., a member of the Canadian Investor Protection Fund and the Investment Regulatory Organization of Canada. Insurance products provided through Hollis Insurance.

This story was created by Content Works, Postmedia’s commercial content division, on behalf Action Financial Group, HollisWealth.

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