Making a holiday budget

Published by: LifeWorks,

making- a - holiday - budget

Two in every five Canadians can’t afford the extra costs that come with the holiday season but feel pressured to spend more and more every year on gifts. But other holiday expenses are driving the shopping budgets out of control – from decoration and entertaining to Boxing Day sales and food, the average Canadian spends more than $1,000 during the holiday season.

Keep holiday spending under control with budgeting. Many people blow their holiday budgets because they get carried away by the excitement and spirit of the season. It’s important to remember that you can still have a joyous holiday season without going over your budget.

How to set and stick with a holiday budget

1. Set a holiday budget

Get control of holiday expenses by deciding exactly how much you can spend in advance. Gifts, entertaining, travel, and decorating are the four main areas in which most people spend. And each of these areas comes with hidden expenses. For example, gift wrapping and shipping gifts.

2. Make a gift list

Take the time to make a list of everyone for whom you’d like to buy gifts. Next, check your “Naughty or Nice” list. Twice! Are there people who could receive a card rather than a gift? Then, set a price limit on each gift. For example, $30 on family and $10 on friends. Plus, the cost of wrapping paper and shipping. Also, try to avoid feeling pressure to give expensive gifts. The best gifts are the ones that are personal and meaningful to the recipient.

3. Make a shopping plan

Don’t head out to the mall without your list of gift ideas and price limits. This is how you end up spending more than you budgeted for. Look through catalogs or websites for ideas and develop a list before you even step foot in a store.

Great family gift ideas

A board game, a “movie night” with gift certificates for the cinema and snacks, or an art pass to a local museum for the whole family.

4. Let’s entertain

Even if you aren’t having a party, providing snacks for neighbors or friends who drop by and serving the holiday meal can be expensive. Try to think of ways in which you can cut back. For example, invite friends and neighbors over for a cookie swap rather than baking batches to give away. Or ask family members to contribute a dish to your holiday meal instead of supplying all the food yourself.

5. Make careful travel plans

If you’ll be traveling during the holidays, check all of your options as early as possible and be sure to include these costs in your budget. For example, could you drive instead of fly? If so, drive the vehicle that gets the best gas mileage. If you need to travel by air, be sure to spend time looking for the lowest price ticket. If possible, stay with a friend or relative instead of in a hotel room. Numerous websites compare travel costs – KAYAK, Booking.com, TripAdvisor, Expedia, and many more.

6. DIY decorating

From Christmas tree decor to outdoor Christmas decorations, make sure to add the expenses to your holiday budget. This is often an easy area to cut back in. Think about what you did last year and determine whether you can reuse any decorations. Or you could make it a family get together and create homemade decorations!

7. Set expectations with friends and family

If you’re worried about finances this holiday season, talk about it with friends and family. Let them know if you’ll be cutting back on the number of gifts or how much you plan to spend. This is especially important for children, who don’t fully understand the cost factors. Also, consider price-limited charitable donations in the family’s name.

8. Look for bargains

Take the time to look for ways to save money on decorations and gifts. Consider buying items during the “after the holidays sale season” and put them away for next year. Try to buy several things from one catalog or website to save money on shipping, or better yet, look for sites that offer free shipping. Use sites like the NexTag, PriceGrabber, or Shopping.com for comparison shopping or sites like eBay or Overstock, both of which offer many new, high-quality items at discount prices.

9. Cut back on mailing expenses

If you always send boxes of gifts or holiday cards to loved ones far away, think of ways to save on or eliminate shipping costs this year. Buy magazine subscriptions or send online gift certificates instead of shipping gifts. Send holiday postcards or even e-cards instead of regular cards. And be sure to mail things early so you don’t have to pay extra for fast shipping.

10. Keep it simple

Focus on enjoying the simple pleasures of the holiday season, like spending time with friends and family or taking a walk to see the holiday decorations in your neighbourhood. These kinds of activities often capture the spirit of the season better than expensive gifts or elaborate celebrations.

Adding it all up

Finally, add up the estimates from all areas. If the total amount is more than you can afford, go back to your lists to see where you can cut back. Ideally, you’ll have done this early enough in the year, so you can slowly set aside money to cover your holiday expenses or have purchased price-limited gifts throughout the year.

But if you haven’t, you can look for even more ways to trim your holiday budget while cutting back your regular expenses and putting money away for the holidays. Once you’ve reached a reasonable budget limit, you need to commit to sticking to it. Remember, you don’t have to be a Scrooge to save money!

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