Holiday budget advice: how to avoid going into debt
The holiday season is fast approaching, and for many, it can bring a mix of excitement and stress. As we transition from childhood to adulthood, the holidays can take on a new meaning, often leading to financial strain and pressure. However, with some strategic planning, smart budgeting, and preparation, you can navigate the holiday season without breaking the bank.
According to Made in CA, the average person in Canada spends around $1,593 on holiday expenses, including gifts, decorations, entertainment, and more. One common mistake people make is leaving their holiday shopping to the last minute, which can result in unnecessary debt and financial stress. Instead, consider setting a realistic budget for yourself and stick to it by planning ahead.
Start by estimating your total holiday spending, including gifts, travel, and food. Break down your budget into specific categories and allocate a set amount for each. Make a list of people you need to buy gifts for and set limits for each person to avoid overspending. Utilize cash-back cards and programs to earn rewards on your holiday purchases, providing some extra financial flexibility.
Get creative with DIY gifts and decorations to save money. Consider making personalized gifts or crafting your own decorations instead of buying expensive items from stores. Additionally, avoid going into debt during the holidays by creating a holiday savings account. Contribute a small amount each month starting in January to build up a fund for holiday expenses.
Start your holiday shopping early, taking advantage of post-holiday sales in January and pre-holiday sales like Black Friday. Prioritize experiences over the amount spent, focusing on quality time with loved ones rather than extravagant gifts. By planning ahead, budgeting wisely, and starting your shopping early, you can enjoy a stress-free holiday season without financial worries.
Christopher Liew, a CFA Charterholder and financial advisor, provides personal finance tips for Canadian readers at Blueprint Financial. For questions, tips, or story ideas about personal finance, contact dotcom@bellmedia.ca.
