The upcoming holiday shopping season shouldn’t put you, your budget or your finances into the red. You’ll want to enjoy the time leading up to the holiday festivities, but once the presents have been unwrapped, the food consumed and spirits spread, you certainly won’t want to deal with a bunch of new debt that you could have easily avoided. It isn’t too late to start preparing your budget for this year’s holiday shopping with the help of a few budgeting tips.
Don’t forget about your regular day-to-day expenses
You need to look at your income, expenses and current debt payments to see what you can afford to spend when budgeting for the holidays. I know it’s expected that you buy gifts, entertain, etc., but remember, it's also expected that you pay your rent/mortgage, utilities, car loan, and other bills.
Decrease expenses for the next 30 days
If you would like to have more holiday money, look at ways to decrease your expenses between now and then to save money. You could decide not to eat out for the next few weeks and add those funds to your holiday budget. Cut out coffees and take your lunch to work; watch movies on Netflix instead of going to the theatre; take an UberPool and save on fare; and don’t spend money on clothes or toys this time of year. Look at your expenses and see where you can make some changes. Whatever savings you create, make sure to add them to your holiday budget immediately to help keep you motivated.
Budget on your paydays
Once you know what you can afford to spend, set a budget for your paydays between now and the holidays — we’re about a month away! You may not want to start shopping right now, but you can put money away each payday so the funds are there when you’re ready to shop. Some people leave their shopping money in their bank account while others put it in an envelope or a jar.
Make a list and check it twice
You need to make a list of everything you need (and want) to spend. That includes gifts, stocking stuffers, decorations, cards, wrapping, food, baking supplies, and clothes. Check out the prices of each item in flyers and online and see whether they fall within your budget. If not, start trimming (and we don’t just mean your tree). Do you really need to buy a gift for everyone on your list or can some be eliminated? Maybe you can establish a lower spending level for gifts, or speak with the other adults in your family and agree to just get gifts for the kids. You can also consider doing a Secret Santa exchange with the adults and set a realistic spending limit. The important thing to note is that you have options!
Don’t wait until the last minute to go shopping
People tend to spend more when they’re rushed, so spread out your holiday shopping over the next month and plan your outings. Also be sure to keep your list handy — maybe add it as a note in your phone—so you know what you have bought and for whom. By taking your time, you are less likely to be tired and stressed out when shopping, which can save you money. No last minute, unbudgeted purchases for you! And remember to enjoy yourself, including your holiday shopping. Go with a friend, separate to do your own thing and then meet up for a cup of tea or cocoa and to rest your feet. Enjoy the holiday sights and sounds.
Leave your credit card(s) at home
No, that’s not a typo. Going holiday shopping with your credit cards can be very, very dangerous because it’s way too easy to overspend. Using cash makes it much easier to stick to your budget, which will help prevent the dreaded debt hangover in the New Year.
Bonus Tip:Start the New Year off right by setting up automatic deposits into a savings account every payday for next year’s holiday spending. Some employers may offer to do this on your behalf or you can have your bank transfer a set amount each pay to the account. This doesn’t mean you can spend more next year — only that you will be better prepared.
If you want some help with budgeting or an expert’s opinion on your finances and debt, the certified credit counsellors at Credit Canada are only a phone call away. Through our credit counselling, we will give you 100% confidential and unbiased advice on how to make your holidays merry and have a financially happy New Year. Just give us a call at 1.800.267.2272 to book a free appointment today!