Planning for Large Annual Expenses: AKA Oh Sh!t, How is it Christmas Again?!

Planning for Large Annual Expenses: AKA Oh Sh!t, How is it Christmas Again?!

I don’t know about you, but every year, my brain tricks me into forgetting about the holidays. My first alert to them is October 31, when the Dollarama workers are stuck working late to remove the plastic pumpkins and put up the Christmas kitsch.

I get caught up in the indignation of hearing “Santa Baby” while there are still leaves on the trees, but I forget about the expense train that is rapidly approaching. I used to get stuck in a super stressful debt cycle around this time of year. It looked like this: scramble to cover the large expenses–>get in debt–>pay off the debt–> wipe unpleasant experience from my memory.

Then the following year, when Christmas rolled around again, internally scream “Nooooooo, that’s impossible!!!!” like Luke Skywalker discovering who Darth Vader really is (no spoilers here!).

Break This Cycle like a KitKat Bar

I only know of three effective ways to break this cycle:

  1. Opt out of Christmas (doable if you don’t celebrate, but sucks if you want to take part)
  2. Give everyone only what you find in your closet (half a can of paint, mom?) or
  3. Plan for it as far in advance as you can.

At this point, you might be resigned to needing to lean into your credit card/savings/etc. to account for the 2019 holidays. I have a plan for how you can solve this for the future.

First, be kind to yourself. You are not alone. It is totally normal and natural to want to take part in social events, see loved ones, or spoil your Secret Santa recipient. It probably comes from a place of wanting to feel a sense of community and show people that you love them. Which is pretty darn lovely.

Then, make a strategy for how you are going to work off this debt. Check out our free Debt Workbook. There is one method called the Snowflake Strategy, which feels seasonally appropriate.

Also, start thinking about solving your 2020 holiday problem now.



Take Stock

How much do the holidays actually cost you? Do you like what you spend now? This is not a trick question. I love being able to give my partner a lavish gift at this time of year. Do you like to go home? Do you like to give big gifts? Think about what an ideal holiday expense number looks like for you.

If you know that you like the feel of how you do the holidays, but you don’t know what number that translates to, good news. This is the perfect time to figure that out. 

As you start doing holiday things this year, note what you spend on gifts, travel (and travel-related expenses), and social events. I have made a handy worksheet for you to keep track in Sherlock Holmesian-level detail.

Next Step

Once you have your numbers for this year, add them all together to get an overall number for what the holidays cost you. This may change year to year, but this will give you a useful general idea that will save your tuchus next year.

Let’s say you discover that you spend $1,200 on the holidays this year. That means, if you haven’t been saving for the holidays, 2019 you gets stuck with the problem of “I need $1,200, tout de suit!” Yikes. Not fun.

However, you can start to change the problem for November 2020 you. Instead of needing to rush to find that big number all at once, divide that number by 12. Start saving in January 2020 for your December 2020 expenses. The problem you end up with instead is “I need to save $100 every month.” Much more doable. It might mean picking up an extra shift once a month, or cutting some corners, but I believe you can do it. After all, you have been managing a much more difficult problem up to this point.

Storing Up Like a Chipmunk

Right now, you might be like “how would I stop myself from spending that money during the year?” Most banks and credit unions allow you to have unlimited savings accounts. You could add one and name it “Christmas 2020-no touch!” 

If that still feels too easy to access, you can sign up with a free online bank like Tangerine. You can make an account with that bank solely for the purpose of holding your holiday 2020 money. Boom. Arms-length savings achieved.

Build this $100 (or whatever your monthly Christmas savings number is) into your budget, so that you account for it every month. 

November 2020 you will be so happy. I promise it feels so sweet to get to the holidays and see that you have all the money you need saved up already. You can do this.

Emily Nixon

Emily Nixon

Rags to Reasonable Community Outreach Coordinator

Emily Nixon is an actor/writer/director/filmmaking Swiss Army Knife. She is also a big money nerd and Community Outreach Coordinator for Rags to Reasonable.

She came to this work after becoming completely fed up with living paycheque-to-paycheque and being too afraid to look in her chequing account. She is passionate about empowering other artists and variable income earners to keep doing what they love and feel confident about their finances.

Email Emily at emily@ragstoreasonable.com

Debt Diaries #4: ‘Slash’ing Credit Card Debt

Debt Diaries #4: ‘Slash’ing Credit Card Debt

Current Debts:
Credit Card: $100.00
Bank Loan: $4,577.61

Current Debt Total: $4,677.61

Meedileeemeedileemeedileebowwww. That is the sound of my guitar solo of awesomeness since I crushed $1,000 of credit card debt since I last wrote. How? I sold my brand new iPad that I got as a present. Having just $100 on my credit card feels saweeet!

Feeding the Dragon

Once I decided to sell it, I had a tough time deciding what was the most responsible thing to do with that money. I’ve been reading this great book called Happy Go Money by Melissa Leong in which she talks about compound interest as a dragon—it starts as a baby dragon and grows over time. The book has been motivating me to get a compound interest dragon on my team instead of on the other team (the debt that eats me team). I looked at the interest rates on my credit card (a whopping 19.99%) versus my RRSP (somewhere around 5%) and figured out that in the end I will have more money avoiding the credit card debt than by putting that money into my RRSPs. I felt like such a grown up making that decision.

My House is Now a Store

After that, I want to sell everything in my apartment. I’m driving my partner (an excellent online seller of goods) up the wall with questions like “how much could I charge for this? How about this? What if I bundled them together?”

Incidentally, after I finished the sale on that iPad, I got to the chapter in Happy Go Money about drumming up extra cash. One of her tips is to sell stuff you own online. (Straightens suit jacket) Already ahead of you, Melissa, already ahead of you.

Emily Nixon

Emily Nixon

Rags to Reasonable Community Outreach Coordinator

Emily Nixon is an actor/writer/director/filmmaking Swiss Army Knife. She is also a big money nerd and Community Outreach Coordinator for Rags to Reasonable.

She came to this work after becoming completely fed up with living paycheque-to-paycheque and being too afraid to look in her chequing account. She is passionate about empowering other artists and variable income earners to keep doing what they love and feel confident about their finances.

Email Emily at emily@ragstoreasonable.com

ARTIST 2 ARTIST: HOW I PAID OFF MY DEBT… BY TAKING ON MORE DEBT

ARTIST 2 ARTIST: HOW I PAID OFF MY DEBT… BY TAKING ON MORE DEBT

How I paid off my debt by taking on more debt- From Rags to Reasonable

Lots of artists have lots of debt. But tons of those artists are managing to pay it back, all while living this crazy variable life.

I recently put out a call for artist debt stories and got this email that I just had to share.

Meet Charlotte. She’s a Canadian opera/musical theatre singer based in Toronto. This is her debt story…


“It’s an unconventional debt repayment story – I paid off all of my debt by taking on more debt – but it’s worked out beautifully and given me more stability and peace of mind than I ever thought was possible while still pursuing a full-time performing career.

The short version is this: four years ago, I was freelancing and working part-time at a law office – and I felt like I was drowning in dept. In 2008, I graduated from Western with $26,000.00 in student loans. By 2011, my student line was still sitting at $18,000.00 – due largely to the constant strain on my income from continuing to re-invest in my developement i.e. summer program tuitions, lessons, coachings, travel expenses, audition expenses, etc. I also still owed my parents $4,000.00 and my credit card was maxed at $1000.00. Eeek.

So I bought a house.

With ZERO financial backing from any outside source (not even a mortgage co-signer), at 25 years old, with an annual average income of $24,000.00 gross – I bought a rental property.

In four short years, my rental income has paid off the following: my student line, my parents, and all of my consumer debt – not to mention it also pays my mortgage and all operating expenses (property tax, house insurance, utilities, maintenance and updates, etc.)

I wasn’t simple by any means – it took a LOT of creativity and hard work – but really anybody could do it.”

– Charlotte


I was super fired up by her awesome solution to her debt problem… I also had a ton of questions. (more…)

WHY YOUR DEBT IS AN EMERGENCY

WHY YOUR DEBT IS AN EMERGENCY

Your Debt is an Emergency TitleNobody thinks emergencies are fun.

But there’s one thing about an emergency that can be pretty great.

If you, for reasons that really aren’t important right now, find yourself in the middle of a forest… no food, no water, no idea where civilization might be found … there’s no real question about what needs to be done.

Emergencies simplify all the ‘noise’ of life, and cut it down to pure focus.

I’ve got to get some water, then some food, then climb a tree (and see if I can see a McDonalds sign).

Honestly… sometimes when I’m feeling particularly purposeless or lost I do a little looking over the fence at the ‘green grass’ of an emergency (Which I realize is insane… but this is a safe place… right?).

“I wish I had that kind of purpose… that kind of certainty about what I need to be doing right now”.

Wouldn’t that be a little bit nice??

Well, you’re in luck, because if you’re an Artist with some (or a lot of) debt on the side…. (more…)

Managing the Unexpected: The Story of Emergency Funds for Artists

Managing the Unexpected: The Story of Emergency Funds for Artists

Risk-proof your life.

That’s what the personal finance experts will tell you.

Well, experts.. The prospect of ‘risk-proofing’ an artist’s life seems pretty dang daunting.

Do you guys ever feel like there’s nothing in this business that you can actually control?

I grew up on a farm out west, and it never ceases to amaze me: you can be the best farmer in the world, but if it rains every day, your crop will suck.

It can be the same way for artists. There are so many talented, driven people, but it seems like there have to be a thousand things going in your favour just to book a gig.

So how do you risk-proof that? Because on top of all that uncertainty, you’ve also got the random stuff that can happen to anyone. A tree falls on your bike. Your hot water tank explodes. Your mouth is FULL OF DECAY AND YOU HAVE NO INSURANCE.

It seems like an impossible task, but it’s not. You may never completely ‘risk-proof’ your life, but you can make it more ‘risk-resistant’. (more…)

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