It’s the most wonderful time of the year, filled with activities from trimming the tree to visiting Santa to wrapping gifts. However, all that holiday cheer comes with a price tag: according to the 2023 Holiday Outlook, Canadians plan to spend $1,347 over the holidays.
With high inflation and ballooning food costs, families may feel the pinch this holiday season. However, you can still make it a magical time for your family without racking up additional debt. “This is a good opportunity to reflect on what your values are and what’s most important to you,” says personal finance writer, Sandy Yong.
Make a holiday budget
Managing spending over the holidays starts with creating a budget – ideally ahead of time. “This way it allows you to save money, so you don’t feel as much financial strain during this time of year,’’ Yong explains. “It also means you’ll be less tempted to rack up your credit card or to put your purchases on a Buy Now, Pay Later (BNPL) plan.”
Creating a detailed budget will help you be mindful of your spending habits. If you’ve got kids, the bulk of your holiday budget will likely be allocated towards gifts. “However, don’t forget to include other categories such as decorations, photos with Santa, entertainment and festivities, meals, travel, and holiday attire – ugly Christmas sweaters, anyone?” says Yong.
Creating a budget is the first step to managing finances, but the real test is following it. Whether it’s a notebook or a spreadsheet, keep track of what you are spending.
“Having a spending limit and comparison shopping will also help to ensure that you don’t go over budget,” says Yong. “Before heading to the stores, check to see what you already own. You may find some holiday arts and crafts or attire that you stored away that you can reuse.”
There are also plenty of free apps to help you find the best deals, whether it’s Flipp for shopping for holiday groceries, or save.ca for gifts and electronics. Yong also suggests looking for deals during Black Friday and Cyber Monday. Or if you’re someone who is a last-minute shopper, you may score a great deal on early Boxing Day sales.
If you have a large extended family, consider swapping individual gifts for a Secret Santa. Alternatively, buy a gift the whole family can enjoy – like a board game.
Immerse yourself in the magic
It’s tempting to want to spoil your kids over the holidays, but it’s the time you spend together that will probably matter most to your family. And those activities don’t have to break the bank.
“Consider more affordable activities and holiday traditions such as baking cookies or going ice skating,” says Yong. Attending a carol service, hosting a holiday movie night, or packing a thermos of hot chocolate and checking out the Christmas lights in your neighbourhood are all free activities. “Ultimately, spending quality time with your loved ones and taking photos and videos of these special moments will help you create everlasting memories.”