We all know the holidays can be an expensive time of year and just like everything, if you don’t have a plan, you may end up paying for it (literally) in January. A survey by Bank of Montreal found that in 2017 the average Canadian spent $1,810 on the holidays (up from $1,610 in 2016). The survey also showed of that total, approx. $873 is spent on gifts, which means that there’s still almost $1,000 in additional expenses like travel, food, beverages and charity.
Here are my 8 tips to keep your bank account intact this holiday season:
1. Save small amounts throughout the entire year
The name of the game here is to have the discipline to plan ahead, set it and forget it! Set up an automatic transfer each month that goes into a dedicated account. Try to use an account that you don’t have daily access to. This will help to keep you from dipping into it when you’re feeling the pinch.
2. Have a plan
Create a budget and stick to it! Since you’re following this list diligently, you now have a savings account allocated for holiday spending. Whatever amount you’ve accumulated is what you have to work with. Once you know how much you’re working with, make a list of everyone you’re buying for and allot a specific dollar amount to each person.
3. Do your homework
With the ease of online shopping, it shouldn’t be hard to check two or three online outlets before committing to your purchase. Don’t procrastinate! Start thinking of ideas well ahead of time so you are not forced to rush and buy wherever is most convenient. I remember my grandma pulling out the Sears catalogue in early spring. That might be a tad overzealous, but you get the point.
4. Avoid the shopping sprees
Although it’s tempting to just get it all done in one shot, research has shown that we are far more likely to overspend if using this approach. Experts even have a name for it — “Shopping Momentum Effect” which examines the increased likelihood a consumer will continue to spend once they’ve started. You can counteract this phenomenon by sticking to your shopping list and leaving the store (or stepping away from the computer) for a few minutes when you’re tempted to make un-planned purchases.
5. Consider making gifts
Especially if you have young children, this is a home run for the people you struggle to think of practical and affordable gifts year after year. In our house, it’s grandparents. My daughter has 4 grandparents and 7 great-grandparents…that’s a lot of grandparents! How many ties does grandpa really need? And how much moisturizer can grandma’s skin actually absorb in a year? Homemade artwork, ornaments and calendars will go a long way for very little cost.
6. Factor in shipping fees
Why are ad prices lower online than in store? Typically, it’s because the advertised price does not include additional costs such as shipping, handling, taxes, services fees, etc. Online shopping is a great way to do your homework and price check different outlets, but it’s only helpful if the total price fits within the budget you’ve designed.
7. Check for coupons and discounts
If you’re shopping online, before placing your order, do a search for available coupons or promo codes for your purchase. Many sites offer discounts with the use of a promo code, but for obvious reasons, don’t advertise them directly on their own website. There are a number of sites dedicated to finding promo codes and coupons for popular retailers. I recommend RetailMeNot or RedFlagDeals.
8. Set price alerts for travel
If you’re going to be traveling at the holidays, chances are you know when and where well in advance. Most travel sites allow you to set price alerts for certain travel dates and destinations. Like everything else with the holidays, plan ahead and don’t procrastinate on booking. You will almost always end up paying for it. Credit Canada recommends using a private browser or incognito mode (also known as “shadow surfing”) when doing your search. This way your browser doesn’t collect your browsing information, which some airlines will use to raise rates on the dates you want.
Hopefully this list will keep you in the black and help you enjoy the most important parts of the holidays.