How to keep holiday spending affordable this Christmas

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The magic of the holiday season comes with good cheer and the joy of giving, but it can quickly turn into a financial headache if you’re not careful. Retailers ramp up their marketing tactics with holiday promotions and products long before the holiday season officially begins — a phenomenon, dubbed “Christmas creep,” which creates a sense of urgency that can lead to impulsive buying and substantial overspending.

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However, with six weeks left before the big day, there’s still time to come up with a strategic plan to manage your holiday season expenses, rather than succumbing to the pressure to buy immediately. By embracing the spirit of the holidays with mindful spending, you won’t compromise your financial wellbeing and cause a post-holiday debt hangover. With this in mind, here are money tips to help keep your season merry and bright.

The key to successfully navigating the financial aspects of the Christmas and winter holiday season is awareness. Begin by recognizing the tactics retailers employ to boost sales during this exceptionally profitable time of year. “Christmas creep” underscores the commercialization of the holidays, exerting pressure on consumers to continually chase deals to avoid missing out. While everyone aims to find the perfect gift at the best price, prolonged holiday marketing campaigns can lead to shopper fatigue and frustration, often resulting in poor purchasing decisions and overspending.

To help stay on track financially, remove emotions from your spending decisions. Start by reflecting on your money habits and then make a comprehensive list of the expenses you’ll encounter over the next two months. Establish a realistic budget by considering all of your potential expenses, such as gifts, decorations, travel, outfits, winter sports, recreation, out-of-school activities, New Year’s events, and special holiday meals. Once your list is complete, allocate specific amounts for each category. With your list of people that you want to buy gifts for, jot down an estimated amount that you can afford to spend on each of them. Then, check your list twice. This approach will give you a clear picture of your total holiday costs.

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If your anticipated costs are higher than what you can realistically afford, take a moment to step back and unplug — both literally and figuratively — to gain a clearer perspective on what the holidays truly mean to you. Go for a walk and leave your phone at home, or power it off if you need to bring it for security reasons. Take in the natural world around you to remind yourself that there is more to life than what you see on your screen. With a refreshed mindset, review your holiday spending list to identify areas where you can scale back.

Reducing holiday expenses can be achieved in various ways, and a mix of decreasing costs, saving wherever possible, generating additional funds, and getting creative with your spending can help keep costs low without dampening the holiday spirit and ensuring that your generosity doesn’t come at the expense of your financial stability.

When it comes to spending, use apps that help you find deals, sign up for newsletters to score discounts, and set up price drop alerts for items on your list. However, it’s crucial to avoid buying more than you need just because something is on sale. To further offset purchases, cash in loyalty points, use old gift cards toward new purchases, redeem cash-back rewards, and look for two-for-one offers to buy similar gifts for different people. Consider making homemade gifts, crafting personalized gift cards for acts of service, or creating decorations to share a personal touch with friends and family that store-bought items can’t match.

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Begin your holiday shopping as early as possible to spread out your purchases and avoid the last-minute frenzy. This approach also lets you budget your spending over several weeks, rather than scrambling to gather a large sum of money all at once. If you’re using a credit card for some purchases, check your statement cut-off date and plan to spread payments over two billing cycles. Just make sure to pay off your credit card balance in full when the bill arrives to avoid interest charges, which can quickly erase any savings you might have found while shopping.

Minimize your non-essential pre-holiday expenses as much as possible to free up cash for seasonal expenditures. Even a short plan is better than no plan, so talk to friends and family about creating new traditions. For instance, instead of expensive outings or gifts, consider organizing a potluck dinner, hosting a movie night with holiday classics, taking a walk or drive to admire holiday light displays followed by hot chocolate around the fire, or planning a DIY craft day. These activities can be just as enjoyable and memorable as more costly options, allowing you to focus on what truly matters: spending time with loved ones.

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Awareness will help you navigate this festive time with both joy and caution, as the holidays should emphasize love, peace, and happiness. By planning ahead, budgeting wisely, and finding creative ways to celebrate, you can enjoy a stress-free holiday season without compromising your financial well-being.

Sandra Fry is a Winnipeg-based credit counsellor at Credit Counselling Society, a non-profit organization that has helped Canadians manage debt for more than 28 years.

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