As a mother, one of Lesa Hannah’s favourite Christmas traditions is putting together a stocking for her two children. “There’s something so exciting about reaching in and pulling out the next surprise,” she said.
In previous years, she filled up stockings with gift cards — even an iPhone. But this year, to save money, those same stockings will be stuffed with mostly gummy candies and books.
Hannah is among the many Canadians surveyed who have vowed to cut down on their holiday spending in 2025. According to a new TD survey, one in three Canadians are spending less this holiday season, with 67% of respondents attributing the move to the overall higher cost of living.
Nearly half of Canadians surveyed (47%) plan to spend the same amount during the holiday season as they did last year, with 36% planning to spend less this year compared to previous years. Only 16% of respondents said they planned to spend more this year.
The holidays are an indulgent time, and people may find themselves going overboard with spending. But Joe Moghaizel, VP of Everyday Advice Journey at TD, points out an interesting tension between overspending on gifts and overspending on social activities noted in the survey.
“More than three-quarters (77%) of our respondents admitted they felt vulnerable to overspending due to the social pressures associated with the holidays, as well as feeling lured by flash sales,” he said. “It’s eye-opening to see how many people feel pressured to stretch beyond their budget during the holidays.”
Making a holiday budget
The best way to avoid being ambushed by expenses this time of year is to build a budget, Moghaizel said.
“Creating a budget for your planned holiday spending and sticking to your list can help keep financial anxieties at bay,” he said.
Once you’ve determined the maximum amount you feel comfortable spending, write down a list of all the items you plan to shell out for, including gifts, events, and donations, and stick to it.
“There are plenty of smart ways to make intentional spending part of your routine, and it starts with creating a budget. It could be as basic as using a pen and paper, spreadsheet, chatting with your personal banker or, if you’re a TD client, using tools such as the TD MySpend app,” Moghaizel said.
“At the end of the day, having a clear plan and sticking to it can ease stress and help give you that sense of control we all want during the holidays.”
While adhering to a strict budget might seem harsh, especially during “the most wonderful time of the year,” it’s actually the opposite; saving helps establish a more solid foundation to achieving financial freedom. The survey found that 29% of respondents planned to cut holiday spending in order to prioritize saving, which Moghaizel counts as a smart move.
“If you find yourself with even a small amount of money, consider incorporating saving and investing into your holiday budget so that you can start the new year strong,” he said.
“Perhaps you found yourself saving a small amount from cutting back on subscription services or opting for less social outings. If you put that into a savings account, that can grow into a safety net and help you put your best foot forward for the new year.”
This year, Hannah has set a total budget of $500 for gifts and plans to start holiday shopping earlier to avoid last-minute temptations.
“This whole season, you’re bombarded with deals starting with Black Friday, so I’m trying to be a lot more thoughtful about what I’m getting. I don’t want to buy things just for the sake of buying them,” she said.
“That means I’m going to start earlier and not wait until mid-December when the panic hits.”
Get creative
Hannah said she also decided to eschew what she deems “landfill toys” — less meaningful gifts that spark temporary excitement but are easily forgotten — and started exploring secondhand shopping as a way to source more affordable gifts. A thrifty shopper who often uses resale apps, she’s resolved to keep her eyes open for similar bargains when shopping for other people in her life — as evidenced by a sweater she scored for her daughter at a consignment store for $15, less than half its original price.
Plus, presents don’t have to be expensive in order to be thoughtful or well-received. Moghaizel said Canadians shouldn’t discount the value of a thoughtful homemade gift or the gift of quality time.
“The holidays are about making memories and spending time with loved ones, and you don’t need extravagance for that,” he said.
According to the survey, Canadian respondents are employing several different strategies to assist with their savings. At least 46% of respondents plan to cut back on gifts for family, and 44% will reduce social spending such as restaurant bills.
Some 31% of respondents mentioned they plan to redeem loyalty points to help shrink the cost of gifts, while 24% plan to shop locally to avoid costly shipping fees. Some folks even plan to cut back or cancel their vacations (21%) in order to economize.
Hannah acknowledges that the holidays can be a stressful time of year, which can often contribute to the pressure to spend. In order to cut down on impulse buys, she said it’s important to take your time, pace yourself, and not lose track of what the season is all about.
“If I’m more proactive and give myself more time to find the right things, then I’m not going to panic-spend large amounts of money,” she said.