At this time of year the topic of getting through the holidays without financial stress invariably comes up. In a recent BMO holiday spending survey, over half (54%) said thinking about holiday spending causes financial anxiety.
After enduring several years of relatively high inflation and interest rates, 79% plan to cut back on spending during the holiday season. On average, survey respondents plan to spend $519 on holiday gifts and $1,991 when you include holiday travel, entertainment, and other expenses, though 21% are not confident they will pay off their holiday bills on time.
Here are 4 tips to help you avoid the post-holiday hangover:
1. Don’t deck the halls with debt
Set a realistic spending goal, make a list (🎵check it twice!🎵), and stick with it. Spend according to what you can afford, not what you think will (momentarily) impress your kids or others.
2. Plan ahead… WAAAAY ahead
Set aside money every month leading up to this high-spending season. Start in January for next December!
If you’re starting from scratch, don’t just throw everything on a credit card and hope for the best. See #1.
3. Get creative and channel your inner workshop elf
Money doesn’t grow on Christmas trees so stop kidding yourself. Rather than spending more, put time, thought, and effort into your gifts.
- make a photo book with your kids for their grandparents
- build or knit a custom, personalized gift that will be treasured
- offer services, like babysitting or cooking your specialty dish for your favourite foodie
4. Have “The Talk”
No, not that one… the other one that people find even more uncomfortable.
Money can be the elephant in the room, not just in marriages and partnerships but among family members. Don’t be afraid to bring up the subject of holiday spending; be honest and don’t pretend it’s all good.
Let your family know you are trying not to spend money you don’t have, or that you have other important financial priorities. Suggest a gift exchange – everyone draws one name instead of trying to buy for all. You’re probably not the only one who will be relieved!
Join the Conversation:
Share your ideas of how to enjoy the holidays without financial stress!
This post first appeared in 2012. It has been updated with current data and/or information and republished.
We had a great conversation last night at Money Mondays in Barrie, Ontario. All of our attendees have teenagers and we talked about great ways to give gifts they will like without breaking the bank. Some of our ideas: a “family box” of older movies (bought used or off of the sales racks) and popcorn, candy; grocery gift cards for kids away at school; excellent regifts (an older lazy-boy, a stack of great books); giving family heirlooms. Shopping online can allow you to avoid the crowds and stay away from self-shopping and getting off your list. Great topic!
Great Tips!
What we do each month is save money in a separate bank account for Christmas time which helps take the pressure off during the holiday season. Budgeting the money has helped us to control our spending and we know exactly what we have and don’t have. There will be no stressing over debt and bills in the New Year in the CBB family. Cheers Mr.CBB
Love the idea of a family gift! I often do a charitable donation for my parents, or the family that has everything. World Vision (www.worldvision.org) and Kiva (www.kvia.com) are two great, fun examples. No shipping, no taxes, not even the cost of a card as its usually all included!
Gift certificates are also an easy way to avoid the crowds and stick to budget. They are quick and easy to buy and taxes are included!
A few suggestions were brought up to make Christmas more affordable that were new to me. Using your Airmiles points for gift cards at the LCBO can save a lot of $$$ out of your Christmas entertaining budget. Or using them for drug store and movie gift cards can be a great gift for teenagers on your list. Regifting was a big one as long as you remembered who gave it to you. That could be an embarrassing mistake!