For many of us, the joyous highs of the holiday season are often followed by something a lot less pleasant: holiday debt.
According to a new TD survey of Canadians 25 years and older, 69% of Canadians are spending less this holiday season. While cost-of-living concerns and inflation are impacting spending habits, 66% of Canadians surveyed are still planning to spend up to $1,000 during the holidays.
So, whether you're purchasing gifts for your loved ones, are hoping to create some holiday magic for people you care about or want to spruce up your home with some seasonal décor, with a little bit of planning, there are ways to help reduce costs for a more budget-friendly festive season.
Here are four cost-conscious holiday budgeting tips to consider this year:
Make a gift plan and check it twice
This has been an unpredictable year and your financial situation may have changed considerably, so now more than ever, it's important to plan—even when it comes to gift-giving.
Rather than buying gifts impulsively or leaving your shopping to December, consider setting up a holiday budget that can help you track your spending throughout the holiday season.
There are a few things to consider when making your holiday gift-giving budget, including:
- Who's on your gift-giving list?
- How much do you plan to spend for each gift?
- Did you overspend for gifts and/or were there areas where you could have saved money last year?
- Do you plan to set some funds aside for charitable donations?
Once you have a sense of what expenses are ahead of you this holiday season, you can start to plan accordingly and spread the gifting expenses over a longer period rather than all at once. If you're a TD customer, tools like the TD MySpend app can give you real-time transaction notifications and insights on your spending habits so you can track your spending throughout the holidays.
Factor in delivery costs when researching to find the best deals
You're browsing online when you find the perfect rose-hue sneakers your certain plastic-doll-obsessed sibling would love to add to their growing collection of pink merchandise. Even though the potential gift is on clearance, unexpected high shipping charges at checkout could suddenly bring the cost of the product back up to full price.
Although going online to do comparison shopping is good practice, remember to factor in the full cost of an online purchase where any delivery charges are added.
Look for retailers that offer free shipping and who will ship items directly to your recipient. And if you’re planning on buying from a retailer outside of Canada, be sure to account for other potential costs, such as customs and duty charges, as well as the foreign currency exchange rate.
Also, if even after your thorough comparison shopping you find you simply cannot spend money on a gift for a loved one this year, you should consider letting them know ahead of time that you would prefer not to exchange gifts which need to be bought. It could be a good time to consider a more budget-friendly gift exchange or experience where the gift is one that is handmade.
Give gifts that don't cost (a lot of) money
Your friends and family are priceless, but the gifts you buy them are not.
If you're concerned about going over your budget, don’t discount the value of giving something you've made yourself. Some of the best gifts are sometimes those that are not store bought.
Baking for loved ones, watching a movie at home together, or going together to enjoy a winter-related activity like skating or tobogganing can be wonderful alternatives to traditional gifts.
Recycle and upcycle decorations
What is good for your pocket can also be good for the planet.
Avoid buying new festive decorations each year and consider purchasing decorative lights and decorations that can be used again and again. For more cost-cutting options, call on nature to help you decorate your home for free. Gather fallen pinecones or branches to create your own wreathe or centrepiece, or to simply bring festive colour and aroma into your home.
After all, spending time with family and friends is what the holiday season is truly about.