Money Fix: How to budget for the holidays

Spreading good cheer doesn’t have to break the bank

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Save up
Last year, Visa Canada reported that Canadians would spend an average of $930 each on gifts alone. Elena Jara, an education coordinator at the credit counselling service Credit Canada, suggests that the most painless way of paying for holiday expenses is having a set amount transferred from your chequing account on a regular basis into a savings bond or a designated account. An automatic withdrawal of $50 per paycheque, based on a standard biweekly pay period, could give you $1,300 a year for holiday goodies – start now for next year.

Use cash
Some credit cards begin calculating interest charges immediately after you buy an item, so even if you pay off your bill quickly, that $100 gift costs more. “The biggest misconception is ‘I will be able to deal with [my spending] after the holidays,’ ” says Jara. “But the reality is, when the bills come in, people say, ‘I can’t believe I actually spent that much.’ “

Shop early
Finishing your shopping before December 24 can let you take advantage of sales and will keep you from impulsively buying expensive gifts out of panic. Shopping at the last minute costs more, says Jara: “We find we are willing to spend whatever we have to, to make sure we don’t look bad.”

Go green
Reuse your gift bags and bows from last year, and instead of buying a whole new set of decorations, make them the old-fashioned way by using pine cones and pine boughs as well as strings of popcorn and cranberries.

Do it yourself
Homemade treats or crafts make the perfect hostess gift. Pick an afternoon in early or mid-December to prepare your stock for seasonal parties or “forgotten” gifts.

Feel the spirit
Focus on what you want the holidays to be about for you and your family, and build rituals that don’t have a big price tag: Go tobogganing, decorate your tree together, rent seasonal classic movies such as It’s a Wonderful Life or walk around and take in the holiday light displays. Remember, though, that the holidays often involve untouchable traditions, so talk with parents, siblings or your partner to make sure they don’t mind making potluck a new custom when it is your turn to host the big family feast.

Look beyond bucks
You can cut back on the number of presents and still have fun. Try playing Secret Santas, where everyone in your family buys a single gift for one, pre-arranged family member. Or give children only three gifts – one large, one medium and one small – and build up the mystery of what’s in those shiny wrapped boxes. “People say, ‘It’s the only time I can splurge on my kids,’ but that’s not true,” notes Jara. “The main purpose of Christmas is to get together and feel close to your loved ones. And that doesn’t cost anything.”