The year 2023 has been difficult for many Canadian consumers due to things such as rising prices and interest rates. According to a Deloitte study, 33% of Canadians are worried about how they will pay for holiday gifts this year, while 67% are concerned about the impact of a recession. Despite this, there are many ways to spend money responsibly by budgeting for the holidays.
We’ve put together a few ideas to help you stick to your budget while enjoying the best parts of the season.
Budgets can help you prevent going overboard
This season, plan to start the new year without holiday debt. To avoid overspending, create a budget for things like meals, entertainment, decorations, and clothing. When it comes to gifts, make a realistic list that includes current pricing and taxes.
If you have never made a budget before, there are different types of budgeting styles – everything from envelope budgeting, zero-based budgeting, and even spreadsheet templates. Trying different styles and budgeting apps can help you figure out which method works best for you.
Be realistic with your spending
One of the best ways to be realistic with your budget is through gift purchase understandings with loved ones. You’re likely not the only person feeling the crunch this year, so it can go a long way to ask loved ones to put a dollar limit on gifts, buy gifts only for little ones, or even not exchange gifts at all.
If gift-spending conversations are uncomfortable, consider being generous with your time and attention instead of your wallet. If you host a dinner, for example, ask your guests to bring their favourite dish. You’ll be sure to remember the time you spent together, not how much money you spent preparing the meal.
Plan for next year
One of the best ways to make your next holiday season even better is to keep track of your spending this year. For 2023, mark down the amount you spend on gifts, meals, travel, and decorations. Next, total your costs and divide by twelve. Now you’ll have an idea how much you should be saving every month throughout 2024 for your holiday budget.
If you want to make next year’s holiday budget a little bigger, try cutting out one expense for a month – perhaps your daily coffee or weekly take-out meal – and apply that money to your holiday budget. Even better, set up an automatic transfer to a high-interest savings account so the money will be there when you need it.
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