Budgeting tips to help you rein it in this holiday season

Happy holidays, season’s greetings and all of the wonderful celebrations that come along with it. For many, it’s the most wonderful time of the year. It may feel less so when money is tight, and you’re worried about going into debt securing gifts for your friends and family. Not only is there stress to find thoughtful and unique gifts for each person in your life, but on top of travel and celebrations, the season of giving can leave you feeling a bit depleted.

Start by taking a deep breath. There are plenty of creative solutions that can help simplify gift-giving and trim the spending so you can also enjoy the season and not only worry about making it perfect for everyone else.

Lists are everything. It may sound like extra work during an already hectic time, but going into the season prepared–– having a plan and sticking to it will help cut back on extra costs and chaos as the holidays near.

A solid holiday spending plan is a great way to keep stress lower this holiday season, so come up with a budget. Look at what you spent the last couple years and see if this year’s list needs tweaking. In the months leading up, pull up your credit card and account statements and see if there are areas in your everyday spending where you can cut back to put some extra money away.

Come up with a rough number so you know what you can comfortably spend without going into debt. Once you have this number in mind, start making lists of what you need to spend on–– such as travel, gifts, entertainment, and decorations.  

Holiday travel can be a big expense, so if you are heading out of town, start looking early. Not only will you likely find lower fares the further out you book, but it also spreads the holiday expenses out instead of cramming your costs into one month.

Try using a travel app that monitors changes in travel costs and set up alerts for your destination. See if you have points or travel rewards earned on your credit card that can be redeemed for flights or hotels.

Once you calculate your travel expenses, subtract that amount from your holiday budget to see how much you have left to spend on the other categories. 

Write out a list of everyone you need to shop for and put it in priority order. Come up with specific price points and gift ideas for each person. Having a clear visual of what you can afford and where you are spreading that cheer will help you avoid entering the new year with stress and unexpected debt.

Keep track of what you’ve bought. Whether it’s handwritten in your journal or neatly laid out in a detailed spreadsheet (if so, nice!) write down what you have bought for each person instead of hiding small gift under the bed and on dusty high shelves. If you are an early starter, inevitably, you will forget a few things you purchased in advance and could end up overbuying. This is also an easy mistake to make if you are shipping gifts when spending holidays with family out of town. It’s best to write it all down and continue updating as you go. Include prices and where you shopped from to help you stay within that budget and avoid surprises on your credit card bill in the new year. 

Walking into a shopping center during peak holiday season can be overwhelming and costly, especially if you don’t have your list with you. Keep it accessible so you can cross things off as you go, and if possible, start shopping early. Getting a head start is a great way to resist impulse buys or those ‘last-minute deals’ at the checkout counter.

When you can, avoid the department store crowds and shop locally. This will help you save on shipping and boost small businesses in your community. 

Online tools can make budgeting for the holidays or tracking your spending easier. 

Not great with spreadsheets? Never set up a budget before? Scotia Smart Money by Advice+ can help.* This free tool in the Scotia app helps make it easy to track your bills, monitor spending and manage your cash flow.^† Plus, you'll get personally tailored advice you can use to better manage your money.

You can also consider the Scotiabank Money Finder Calculator to see where you're at with your income and expenses and if you have additional funds to put toward your holiday costs. Although the tool is designed to help you prioritize everyday living expenses rather than holiday shopping, working with it could give you a helpful framework for your holiday spending budget.

For many Canadians, despite inflation cooling a bit, years of financial pressures are still a concern. Consider some of these ‘outside-the-box’ unique gift-giving ideas that are much gentler on your wallet:

Have relatives, teachers or co-workers to shop for? This is a good time to get crafty with homemade gifts. Hand-paint a picture frame and find a sweet photo to print and put inside. Maybe you know how to make candles or chocolates–– show off your skills! Buy some baskets in bulk and fill them with fun holiday consumables like homemade cookies, a bottle of wine, hot cocoa blends or some cute socks. Custom gift baskets are thoughtful and cost and time-efficient when done at once. All you need is a big bow, so spare yourself the scotch tape and paper cuts! 

When money is tight but you want to give a meaningful gift, consider ‘give of time’ coupons. These can be used with kids, partners, friends and siblings. 

• Family
  Do you have a sibling or good friend with kids? Give them a babysitting coupon so those parents can have a night off. Or give your niece or nephew the gift of an adventure and take them on an outing, which is a gift for the kiddo and the parents.
  
  
• Special someone
  Want to show your partner how much you care, but you often end up going overboard? Communicate. Have an honest conversation about your finances and agree to a limit. Maybe exchange a meaningful card and plan for quality time instead.  It’s okay not to spend a ton to let someone know how you feel. Instead of expensive gift-giving, why not plan an affordable weekend away or staycation? Find a cooking class or hobby you would like to learn together. It will be nice to designate some quality time to enjoy each other’s company after the holiday hustle and bustle.
  
  
• Friends
  Are you just out of school and still figuring out how to budget for rent and a social life? Have a large friend group and can’t possibly give them all something special? Consider bringing them all together for a gift swap party so you can buy one instead of seven. Or skip gifts and celebrate by spending time together and affordably with a holiday potluck or baking party. You can also share a group bonding experience like volunteering at a food or gift bank and celebrate in a way that is good for the heart. 

If you have kids, the holidays may feel like a whole different ball game. And for some, it is hard not to go overboard. These days, social media posts of kids climbing mountains of gifts under the tree may make you feel like you aren’t doing enough. In reality, half of those gifts get ripped open and never looked at again. And this doesn’t include gifts from grandparents and other friends and family. Chances are your children already have plenty of toys they aren’t even looking at. There are many ways to have a full holiday without putting pressure on yourself to overspend.

• Keep it simple
  Some families follow the “rule of four” for holiday gift-giving with their children. The idea is that each child gets one thing from each category: something they want, something they need, something to wear, something to read. This can help prevent overspending, keep things equal among siblings and help you to give meaningfully.
  
  
• Gather and gift swap
  Another great idea is to plan a holiday gift swap with other parents, neighbours or members of your school or social community.  You likely have some new or like-new books, clothes or toys your kids outgrew before they got to use or that just didn’t pique your kiddo’s interest. Perhaps at Scotty’s last birthday, he got multiples of the same cooking set with no receipts. These are great to regift during the holidays or bring them to a gift swap and come home with a gift that’s new to you. This is also a great way to reduce packaging waste and delivery truck emissions. Whether your motives are environmental or strictly financial, gift swaps are a great way to cut back on spending, declutter before the holidays and bond with your community. Make the occasion even more efficient by having everyone bring gift wrap supplies!

You could be surprised by how much value you have sitting on your rewards cards. Depending on how much you have earned, you could use your rewards to fund a holiday party, purchase holiday gifts or help pay for holiday travel.

For example, a year's worth of your everyday spending on gas and groceries on a cash-back card, such as the Scotia Momentum® Visa* Card, could net you more than enough cash back to pay for several gifts. Also, purchases made with your Scotiabank Passport® Visa Infinite* Card, like groceries, restaurant and transit, could earn you enough Scene+ points (up to 3 points per $1 spent) to redeem your points for travel, gift cards or other rewards.

Some new cards also offer sign-up bonuses if you spend a pre-set amount. If you don't already have a rewards card that earns points or cash back, now's a good time to apply for a card or switch to one of those cards.

It can be easy to get caught up and lose sight of what the holidays are really about –– but remember, they don't have to be expensive to be festive. Set yourself up for a successful holiday season by being prepared, getting creative and treating yourself with the same kindness you spread to others. There are many ways to celebrate and feel good about giving without starting the year with a financial hangover.