How to Keep Your Holiday Spending on Budget
Date: November 21, 2023
It’s easy to go overboard on spending during the holidays. It’s not just gifting we shell out for: holiday get-togethers, travelling to and from events, and spreading holiday cheer, which means credit card balances may unknowingly creep higher.
With the pressures of inflation adding to the financial stress, many are looking for additional ways to stretch their dollar this holiday season. Canadians spent $1,520 on average during the holidays in 2022. While sixty-nine per cent say they will shop for items on sale as a way to save.
Beyond searching for the lowest price on the most popular toys, there are plenty of ways to rein in your spending during the holidays! Here are a few tips to help you save without dampening your spirit:
Review Your Past Spending
The first step to sustainable holiday spending is gathering your bank and credit card statements from last year. Even though you may have already adjusted your spending patterns over the past year, this is a great place to start.
Next, separate those expenses into key categories:
- Gifts – Including wrapping paper, tape, ribbon, boxes, cards and shipping costs.
- Holiday travel – For most people, holidays are spent visiting friends and family who don’t live nearby. Account for gas, airfare, and hotels and remember to include meals while travelling too.
- Food and entertainment – Holiday parties can drive up your spending, whether you’re hosting or attending. Add up the cost of any cooked meals, or parties attended.
- Holiday decor and attire – Did your kids grow out of their dress clothes? Account for all new clothing or extra decor you bought.
- Charitable donations – ‘Tis the season for giving, and charities are always looking, especially during the holidays. Take note of your donations, especially if they were not tax refundable.
Now, take a moment to consider how you feel about those items and amounts. How do you feel about spending a similar amount this year? What could you cut from the list? This is the time to make adjustments, so future you won’t be paying for it in the new year.
Create a Holiday Spending Budget
Now that you’ve reviewed your past spending, it’s time to create your budget for this year – and one that is realistic. After all, racking up expenses or going into debt could mean missing out in the future.
“Your budget is one of the most important tools to ensure your spending stays on track,” explains Jackie Shoemaker, Branch Manager for Westoba. “Having a realistic outlook on your spending, mindfully prioritizing your needs, and tracking your purchases along the way, will be key to reaching your long-term financial goals.”
Tally up your spending for at least the past two to three months of expenses and subtract your take-home pay. After monthly expenses, how much money do you have leftover to spend? Only use the money you’ve already saved, and any extra left over.
Divide the average of what is left over in your budget into the same categories as you did before, including gifts, travel, food and entertainment, holiday decor and attire, and charitable donations.
New to budgeting? Check out Westoba’s Budgeting Workbook for a step-by-step guide!
Narrow Down Your List
Gifts
Gifts will typically take up most of your budget. Can you narrow down your gift-giving list? Suggest drawing names with friends and family and talking about setting a predetermined spending limit. For every person receiving a gift, have a few different gifts in mind before you go shopping; this will help with impulse buying. Shopping early can also help you find the best price on those items.
Events and entertainment
When the weather outside is frightful, stay inside, or suggest a potluck where your friends and family bring their favourite dish. Find free activities, like skating, tobogganing or sit by a winter fire with hot chocolate and smores. After all, the holidays are about being together!
Holiday decor and attire
Refresh older decorations, or go DIY. You can also go through your closet and rediscover outfits you and your family could wear for festive events. Decide if a higher-priced decoration or outfit is necessary compared to what you already have or a less expensive one. It can be fun to cross items off your list!
Charitable donations
Donating can mean more than giving money. See if there are other ways you can help by donating your time or unused items around the house like toys and clothes that your family has outgrown.
Get Creative with Gifts
Meaningful gifts don’t need to be expensive. Share your sweets and treats with friends and family. Are you a knitter? Gift homemade dishcloths. You could also give the gift of service by knocking a chore off someone’s to-do list or offering your babysitting services.
Another way to trim your holiday expenses is to go in on joint gifts with someone. Pool your resources on more expensive items to share the cost of purchasing a higher-quality item for your loved ones.
Redeem Points on Credit Cards
Have you been saving your points for a rainy day? You would be surprised how much you could get with your reward points. For example, you can use points collected from your Westoba Collabria Visa Infinite* Card to gift concert tickets, gift cards, and merchandise.
With rising gas prices, travel costs also add up. You can also use points collected from your credit card for gas gift cards to take a trip for a long-awaited celebration with family.
If you don’t have a credit card that rewards you for your purchases, now is a great time to switch and save for next year!
Start Budgeting for Your Future
Using the information gathered this year, start putting aside monthly money to cover holiday expenses for next year. Using Westoba’s Online Banking, you can rename your savings account to “Holiday Savings” and set up automatic contributions to keep you on top of your goals. Starting now could save you a lot of stress next year!
Don’t bury yourself in debt this holiday season. It might be difficult to not include some people in gift exchanges or do all the activities you want to, but it’s not worth taking on debt or cutting on necessities in the new year.
If you need guidance on developing a budget or are ready to get your finances – during the holiday season and beyond – on track, get in touch with our team at 1-877-WESTOBA or book an appointment today!
