Our virtual Brown Bag Lunches (BBL) are hosted weekly on Thursdays. This newsletter is sent out every Friday and summarizes the key takeaways from the latest BBL.

About this Week’s BBL Hosts: 

  • Nalisha Jagroop has over 9 years of experience in the financial industry with extensive knowledge of retail and community banking through her work at Alterna Savings Credit Union. She joined this week’s BBL to discuss her tips and advice for responsible personal finance, budgeting and borrowing during the holiday season. 
  • Valerie Leloup is the co-founder of NU Grocery, Ontario’s first zero-waste grocery store which opened in Hintonburg, Ottawa in 2017. She shared her expertise as a community small business owner to discuss the community benefits related to shopping local!

This 1200 word newsletter is about an 8 minute read. Enjoy!

The Big Picture:

Every year, as November trickles into December, I am often struck by the sudden realization that the holidays are around the corner and that, once again, I’ve left my gift shopping to the last minute.

  • For many, this holiday panic can often lead to poor consumer habits such as ordering all our gifts online, or spending more than we can afford due to poor planning. 

In this week’s Briefer, I’ll share some of the biggest takeaways from our Gift of Shopping Local Brown Bag Lunch presentation where hosts Nalisha and Valerie broke down the importance of good spending habits as well as the value of supporting local enterprises during this time of the year!

UnScary Money & how to ensure you are spending within your means during this holiday season – with Nalisha Jagroop

It’s no secret that in 2020, many Canadians are struggling with balancing their debt, paying bills on-time and saving money for emergencies or retirement. With that in mind, every choice we make during the holiday season can impact our financial wellbeing. 

So while we are quickly approaching or have passed some of the end-of-year days of celebration, it’s still important to proactively look at our holiday spending.

Thinking about Budgets

Budgets can sometimes seem scary because of how much work goes into them, but even establishing a small snapshot budget for the holidays can help highlight what kind of spending is manageable. So what is a budget? 

  • It’s income minus expected expenses which leaves us with a number: negative, zero or surplus

If that number is a surplus, then we have realistic insight into how we can spend during this holiday season. If our budget shows a negative or zero balance, it provides us with an opportunity to review our expenses, such as monthly subscriptions, to see how we can free up some space. 

While it’s totally ok to look into holiday purchases even if your budget doesn’t show a surplus, we should encourage ourselves to look realistically into what we are trying to achieve with our shopping. 

  • Are we buying gifts out of habit, or do we really want to give people something meaningful. From here we can look for alternatives such as less expensive or free gifts which still achieve our objectives. 
  • In 2020, most people aren’t expecting too much, so even a heart-felt message or card can go a really long way!

Thinking about Credit 

The reality for many of us around this time of year is that we will need to subsidize our income with credit to afford our purchases this holiday season. And that is totally ok, as long as we create a plan to pay back what is borrowed.

So what does it actually mean when you charge something to your credit card?

  • Well in its most basic form, you carry an outstanding balance that will be carried forward into the next month, which will incur interest if it’s not paid off.
  • So if you manage to pay off your balance every month, then you won’t incur interest.

This means that when you receive your monthly statement, it’s important to pay at least your minimum if not more, as your minimum payment represents the interest you have incurred from month to month, so paying it does not actually bring down the principal amount you owe.

While credit cards can be a little scary, they do have positive features: 

  • Using credit cards and paying forward your balance every month leads to a better credit history which can help when applying for house, car or even sole proprietor loans. 
  • They can also be very useful during emergencies or big one time purchases. 
  • Credit cards and monthly statements can help us track our spending and therefore budget better. 

Yet, credit cards can also have negative features:

  • Overdue debt payments can negatively impact your credit score.
  • Meanwhile, high interest payments can have a spiraling effect of drowning debt as money goes towards paying the interest on debt rather than the debt itself. 
  • Finally, the ease of tap, tap, tapping can make it easy to overspend with our credit cards.

A good habit to take from this section is to practice “stop before you shop”, in taking a little time to reflect on debt, finances and what we can afford this holiday season, before we make our purchases, so that we can get ahead in 2021!

The Gift of Shopping Local – With Valerie LeLoup

Now that we have discussed how we should spend this holiday season, let’s consider where we should spend. For the second part of our Brown Bag Lunch presentation, we were joined by Valerie LeLoup who highlighted all the positive impact which shopping local can have on your local community!

Local economic stimulus

  • Buying local is a great way to make sure that your spending is reinvested into the local community. A recent study showed that for every $100 you spend in an independent retailer, $68 stays in the local economy as locally owned businesses create greater local investment.

Unique businesses create character and prosperity 

  • Small retailers and businesses are often the life of our cities, as without them we would lose much of the excitement and vibrance which makes walking down your neighborhood streets a joy! But without support, they can slowly fizzle out, which begs the question of what the large corporate enterprises, which replace them, are doing to animate our communities. 

Environmental impacts are reduced

  • Shopping local often means shorter distances for consumers to travel. Small businesses such as grocery stores and restaurants often have localized supply chains which reduces the strain on the long distance transportation for goods. 

Most new jobs are created by local businesses

  • In 2019, StatsCan reported that 70% of private sector employees work for small businesses (enterprises which hire less than 100 people), so supporting them helps to support job growth in your community. 

The customer matters more

  • Small businesses place a huge emphasis on customer service, in part because some can often be neighbors, but also because they benefit from repeat customers. On top of this, local businesses are much more likely to listen to feedback from customers and implement changes because their management structure is much more accessible. 

Local businesses invest in the community. 

  • Outside of buying and hiring local, many small businesses often try to find ways to give back to the community such as through local charitable donations.

Public benefits outweigh public costs. 

  • When new “big box stores” are created, they usually start from scratch, on green fields in the city outskirts which usually comes at a huge cost to the taxpayers as new infrastructure such as roads and pipes are invested to make these superstores accessible. Meanwhile, local businesses often open in mature communities where resources already exist.

Competition & diversity leads to more consumer choices

  • Finally, when local businesses thrive, the consumer has more choices, often with diversified and unique products for sale. A world where our only choice is between different large corporations just does not sound ideal!

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