As the days on the calendar tick down and the mall crowds grow heavier and heavier, it can be easy to get caught up in the festive frenzy and go over your holiday shopping budget. A study by RBC found that 51% of respondents went beyond their holiday budgets in 2016, up from 41% in 2015.
The good news is there are simple ways to save cash – and time – during the holidays. Here are 6 tips from Scott Hannah, president of the non-profit Credit Counselling Society:
1. Make a gift budget and track it
Canadians are increasingly spending more than they plan to, which suggests a clear gift-giving budget like this one from the Credit Counselling Society’s My Money Coach should be at the heart of your holiday plan. The simpler the budget, the better: A piece of paper listing how much you will spend on each recipient will do.
Then comes the crucial part: following through and keeping your budget balanced.
“If you’re planning to spend $40 per person and you spend $50 on someone, then someone else will get a gift worth $30,” says Hannah. “People who do [track their spending] tend to stay within their budgets.”
2. Credit cards: Think short term
Setting a budget and sticking with it will help you avoid the classic holiday-spending pitfall of deciding to simply put Christmas on your credit card and deal with it in January. Or worse, throughout 2018.
“If you take this approach, you will overspend,” says Hannah. “If you’re going to use credit, think about what you can comfortably afford to repay in the 2 to 3 months following Christmas. If you’re only making your minimum monthly payment, you could add a third to 50% to your purchase price in interest charges.”
3. Shop for deals, not points
It’s no secret that Canadians love loyalty programs. In fact, according to a report from marketing firm Bond Brand Loyalty, we’re collectively holding about $16 billion in unredeemed points.
Focusing solely on points, however, can knock our spending plans out of whack.
“People can be more concerned about points than getting the best value,” says Hannah. “A typical example would be a retailer offering 3 times the points if you spend $100 on a particular day, but you were only planning to spend $50.”
The upside of points programs? If you do have points, now is a great time to cash them in on gifts.
4. Don’t shop hungry
You’ve heard about how you’re more likely to overspend if you go grocery shopping on an empty stomach?
The same applies to Christmas shopping – with a twist.
“If you don’t have a game plan, you’ll spend more time walking around the mall,” says Hannah. “That could lead you to spend unnecessarily at the food court or on coffee.”
The solution? “Eat a good breakfast or a good lunch before going shopping,” he advises. “Bring coffee with you and pack a water bottle in your bag.”
5. Save on entertainment
Entertainment is the 3rd-biggest holiday cost for most Canadians, according to PwC’s 2017 Canadian Holiday Outlook. Here, too, there are easy ways to save, by entertaining at home, say, or throwing potluck dinners with friends and family.
When you do restock the pantry, Hannah recommends going with generic brands wherever possible.
“Once something is cooked, you can’t tell if it’s a name brand, and the savings can be huge,” he says. “My wife, for example, makes a bean salad that I love. Black beans can cost $2.79 for a name brand at the full-service supermarket or just $0.89 for no-name at the discount store. Those kinds of savings can really add up.”
6. Look ahead to next year
Once the tree is down and the lights are tucked away, review your spending and decide what you would like to do differently next year. Then make use of your greatest ally: time.
“If you think you’ll spend $1,000 next year on everything, set aside $100 a month, so by October you have your full Christmas budget on hand,” says Hannah. “To free up additional cash, consider changes like brown-bagging your lunch more often or brewing your own coffee.”
By making just a few adjustments like these, you can set yourself up for a low-stress holiday season this year and for years to come.