Written by: Kaleido
The lead-up to the holiday season is often a very expensive time for families. However, economic uncertainty and its impact on consumer purchasing power will mean reduced spending for many people this year. Deloitte's 2022 retail holiday survey indicates that consumers plan to spend 17% less than in 2021.
Canadians plan on spending approximately $1,520 for the holidays this year, including gifts and purchases to receive family and friends. Sticking to a budget is hard when you want to treat your loved ones, which is why managing your budget is crucial. And while you’re at it, why not ask your children to participate and take this opportunity to teach them the basics of savings? Holiday preparations will put your family budget to the test. Here are a few tips to avoid accumulating debts over the festive season.
Before going out to buy gifts, take the time to make a list of the people you want to give a present to: parents, children, friends, family friends, colleagues, teachers, your children’s educators, etc. Refine your list as needed, set a maximum amount for each person and stick to that budget.
Ask your teenagers to help you plan the holiday budget; this is a great opportunity to break the taboo of money. They can help you make a gift list and plan expenses. They’ll learn how to manage money and a budget.
Don’t feel pressured to measure up; better a carefully chosen present that really means something than some pricy fad that ends up gathering dust. The festive season is about joy and celebration, not about spending big.
Take the time to figure out what you actually have to spend to stay within your holiday budget. Here’s a simple trick: put some cash in an envelope for your purchases. When the money runs out, you’re done. It’s a surefire trick for not spending more than you have.
Ask your kids to keep an eye out for holiday deals and sales. They’ll learn that it’s possible not to spend too much and stick to a budget by comparing prices and doing some research.
Most of our loved ones, whether they’re adults or children, already have a lot of stuff, which makes it difficult to pick something they’ll like. Think about what kind of gift makes sense to you. It should be something you genuinely want to give.
For example, as an adult, you may care about the future of a child dear to you. So, why not gift an RESP or add money to an existing RESP? The child may not be thrilled at the time, but the parent will be able to fully appreciate the value of this gift and the government grants that will add up overtime. The child will realize how useful this special gift is when the time comes to choose the post-secondary education they want to pursue.
None of that sounds like what you had in mind for your loved ones? Be creative: create artworks or cook! Let your children take part in the process; they’ll see that handmade gifts are more valuable than store-bought ones. A customized, meaningful gift made with love will mean a lot to the person you give it to.
Instead of getting something for every member of your extended family just to be polite, have a gift exchange. This way, everyone gives fewer gifts and spends less, saving both time and money.
Not a fan of gift exchanges? Why not try regifting, aka giving back to others? In an era of overconsumption and environmental concern, regifting makes a lot of sense and is becoming more and more popular. You received the same gift twice or something you won’t use? You could give it to someone who needs it or will get good use out of it. Finished a great book that’s still in good shape? Extra wine decanters cluttering up your cupboards? There’s nothing wrong with second-hand gifts. The point is to spread the joy.
We can’t stress this enough—planning is the answer. Just like you plan for your children’s post-secondary education by investing early on in an RESP, you should make your holiday budget ahead of time. Start saving at the beginning of the year. Come December you’ll have a nice little cushion ready to soften the blow.
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