Why you shouldn't buy an ugly Christmas sweater and other tips for a budget-friendly holiday
A shopping centre decked out in Christmas decorations is seen in this file image. (Pexels)
This story was originally published on Dec. 17, 2018
TORONTO -- The holiday season can be filled with joy, but can also be a pain for your bank account.
According to a 2018 survey from PricewaterhouseCoopers, Canadians plan to spend an average of $1,563 over the holidays, up nearly 4 per cent from a year ago.
All this spending can lead to debt troubles, according to CTV News’ Chief Financial Commentator Pattie Lovett-Reid.
“I guarantee you, a year from now there will be people still paying off their credit card,” Lovett-Reid said during a recent interview with CTVNews.ca. “If you took $1,000 and you bought your holiday gifts, and you only made the minimum payment of $25, at the going rate out there, that’s 61 months to pay it off and then you’ve added $500 in interest.”
“Who wants to be paying off Christmas 2018 in 2023?”
Lovett-Reid and Laurie Campbell, CEO of Credit Canada, spoke to CTVNews.ca about some of the best ways to stay on budget over the holidays.
Both experts agree the biggest thing people can do to avoid overspending through the holidays is to plan a budget ahead of time, and stick to it.
“So many people end up buying that one extra gift for this one person…and it really blows the budget,” Campbell says.
Campbell adds the budget you plan for shouldn’t just include the gifts you buy, but should also include your budget for parties, food and outings.
Lovett-Reid said it’s easy for people who don’t plan ahead to be forced to dive into some of their other accounts to pay the bills.
“I really hope people don’t dip into their savings, their retirement fund, their emergency savings, because the fact is, you’re not alone here,” she said.
Potlucks and BYOB parties
Holiday parties can also break the bank if you don’t plan accordingly, the experts say.
Campbell suggests making your party a potluck and asking attendees to bring their own drinks in order to keep the cost friendly.
“(Alcohol) is extremely expensive and most people will (bring their own),” she said. “There’s only the odd person who would come empty-handed anyway.”
Campbell adds potlucks can be more fun than a traditional dinner because people get to taste different foods.
Credit Canada suggests avoiding a purchase of a single-night outfit for a party, such as an ugly sweater or party dress. These can be expensive pieces of clothing that aren’t functional for much beyond those special occasions.
Making sure you compare the prices of gifts at different stores is key, Campbell says.
Comparison shopping takes time, however, so starting your Christmas shopping starter early can help when it comes to finding the right deals.
“If people haven’t started their shopping, get out there now or as soon as possible,” Campbell says.
Because comparison shopping can take time, its best to avoid peak shopping hours, shopping while hungry or with a child, all of which can make the shopper more inclined to spend quickly just to get it over with.
Lovett-Reid suggests taking time to think a big purchase through before deciding to go with it.
“Give yourself 24 to 48 hours, pause, reflect if it makes sense, can you really afford it?” she said. “In some ways you have to put a wall around yourself.”
Lovett-Reid suggests there are plenty of options for giving a meaningful gift that won’t hit the wallet.
This includes using your reward points, which can allow the shopper to buy an expensive gift without spending a dime. You can also barter for gifts or sell some items that you don’t use to give you some extra spending money.
Campbell says offering up your time to someone can also be a great way to give a meaningful gift, without spending money.
“Offer service to somebody,” she said. “You neighbour may have a hard time shovelling snow, offer shoveling snow. Offer service to your teenager of cleaning up their room five times.”
“It’s not about the presents, but it’s about the time you’re spending together and the activities and the traditions that you have.”
For group gift-giving, a Secret Santa is also a good way to stay on budget as then you only have to worry about getting one gift, instead of getting something for everyone.