After the chaos of Halloween has passed, most of us begin to think about Christmas, one of the most beautiful times of the year, but it is also one of the most expensive.
November is also Financial Literacy Month. During this time, the Financial Consumer Agency of Canada (FCAC) works with Canadians and other groups to help individuals and families learn more about money and become more stable financially.
But, almost ironically, it's not uncommon for people to get caught up in a negative spiral of holiday madness, including buying things they don't need. This can put them in a position where they must spend part of the following year trying to get their finances back on track, just in time to repeat the cycle.
How can one ensure that they keep things under control this season? Before succumbing to a seasonal buying frenzy, here are some helpful hints.
Understand where you currently stand with your budget
It is beneficial to plan before beginning to save for the holidays. Make a list of all your anticipated holiday expenses. Once you know where your money is going, determine how much you must spend. It's essential to weigh items like bills or other financial commitments before laying out what you have left to spend during the gift-giving season.
This is especially critical: do not plan on spending more than you have. There isn't much point in limiting future earnings for gifts that may not help the people who get them much in the long run. Even if they make a big difference, you must decide if it's worth the trouble and possible struggle.
Take advantage of deals whenever possible
One of the easiest ways to help cut your holiday spending is to take advantage of sales like Black Friday and Cyber Monday. These are fantastic opportunities to get a jumpstart and save a significant amount of money on some of the more substantial, high-ticket items like electronics. As well as starting early, consider using online shopping to compare and order gifts at the best possible prices.
Also, if mindlessly giving things seems like going through the motions, you can consider gifting an experience (like a course or ticket to an event) or, depending on your creativity, something DIY, like a portrait or piece of jewellery.
Start saving sooner rather than later
Christmas occurs at the same time every year, even though it seems to appear out of nowhere. It's a good idea to set aside money each month at the start of the year to cover your holiday expenses; this will relieve the stress of holiday spending when the time comes. Not sure how much to save? Look at how much you spent last year and divide it by 12 to get a ballpark figure.
The most important thing is to remain realistic; while tempting to create a sense of magic with no limits during the holidays, it’s not worth the stress and potentially adverse effects to your bottom—especially if it means putting undo strain on your credit rating, which could it make it difficult to do things like getting a new vehicle, phone or, well, anything.