The holiday season is known to be full of giving, celebration, and togetherness. However, it can also bring a surge in expenses and financial stress. In the spirit of spreading cheer, we often find ourselves splurging on gifts, planning much-needed vacations, or hosting festive parties and gatherings.
According to the PwC 2024 Canadian Holiday Outlook, the average Canadian intends to spend a total of $1,853 on holiday-related expenditures: $779 on gifts, $829 on travel and $245 on entertainment (source). When not budgeted properly, these costs can pile up and lead to unwanted debt in the new year.
Don’t let the prospect of holiday expenses dampen your spirits! Use the suggestions below to plan ahead and build a holiday budget to navigate this season without breaking the bank.
How to build a holiday budget
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Assess your current financial situation
Start by reviewing your income and current expenses to determine a realistic holiday spending limit. Aim for an amount that won’t lead to debt or impact your savings goals.
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Make your list and check it twice
Once you know your spending limit, start listing all your anticipated holiday expenses. Make a list of all the people that you plan to buy gifts for and how much you are willing to spend on each person. Keep in mind that you don’t need to purchase a gift for everyone; for example, gifting a family experience can also be very thoughtful.
Consider whether you will be hosting events or going on vacation, and account for these costs. Finally, don’t forget other miscellaneous expenses such as entertainment, charitable donations and holiday decorations.
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Prioritize and allocate
Now that you have all your expenses listed, it’s time to prioritize them. Which areas of your holiday spending are the most important to you? What are you willing to spend the most money on? Based on your answer to these questions, allocate your budgeted funds accordingly while staying within your spending limit.
When buying gifts, consider using cash or a debit card instead of putting them on a credit card to lower your risk of overspending and accumulating credit card debt.
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Holiday hacks to save
If you find yourself over budget on paper, try cutting costs elsewhere to save money during the holiday season. This can include:
- Opting for DIY gifts or quality time with your friends and family instead of overspending on material items
- Participating in gift exchanges like Secret Santa or White Elephant to reduce the number of presents you buy
- Shopping early and taking advantage of deals or coupons. That said, watch out for fraudulent or fake websites. Many retailers will offer price-matching to help you get the best prices.
- Trying low-cost activities for entertainment such as ice skating, free light displays, and community theatre performances
- Vacationing in nearby locations to reduce travel costs
- Sharing the load of hosting with others by suggesting a potluck or “bring your own drinks”
- Reusing or making your own festive decorations to minimize expenses
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Track your spending and review your budget
Throughout the season, make sure to keep track of your purchases and review your budget regularly. Look into budgeting apps that can monitor your expenses in real time and notify you if you are reaching your spending limit. Saving receipts can also help in this case (and can help with future returns). Find areas of your budget in which you may be overspending and try to cut back on them. Or try adjusting your budget and prioritization to better suit your needs.
Having a well-planned budget and good spending habits this holiday can transform the experience from a source of financial stress into a time of joyful celebration. While it can be hard to resist splurging on ourselves and loved ones, setting clear financial boundaries will help ensure that the new year is debt-free and just as joyous.
All material copyright MediResource Inc. 1996 – 2026. Terms and conditions of use. The contents herein are for informational purposes only. Always seek the advice of your physician or other qualified health provider with any questions you may have regarding a medical condition. Source: www.medbroadcast.com/healthfeature/gethealthfeature/A-Guide-to-Managing-Finances-During-the-Holidays