By iA Private Wealth, December 06, 2021
Most people look forward to the holiday season because it’s a time to shift focus from work to family and friends. Whether the holiday gatherings are in-person, virtual or a combination, it’s nice to reconnect with loved ones in a festive setting.
It’s also traditionally a time to exchange gifts, which most children – and children at heart! – anticipate well in advance of the season. If managing your bills after the holidays is a regular challenge, there are ways to keep costs reasonable while still joining in the fun.
A budget is your spending roadmap
First, create a budget for your holiday spending. Although few people enjoy going through the process of listing what gifts they plan to buy and how much money is assigned to each gift, having a budget is a practical way to keep spending under control.
If your budget starts looking tight relative to the money available, consider how to cut discretionary costs as a way to compensate. For example, if you usually buy coffee, use ride-sharing services for nearby trips or treat yourself to restaurant meals, you can brew your own beverages, walk or use public transit, and cook more often. You might even find you’re able to sustain these spending adjustments permanently! Once you’ve set a realistic budget, do everything in your power to stay within it.
Resist the temptation to overextend on credit
If you promptly pay your bills every month, credit cards are a good way to make purchases without fronting the cash. However, many people find it easy to spend using credit and then are shocked once the bloated card statements arrive.
The budget you create will cover your holiday spending, whether you use cash, credit cards or debit cards. It’s tempting to shop without keeping in mind that you’ll have to pay for your purchases at some point, and with credit cards the interest charges will add up quickly, which means more debt and more time required to pay it off. Debit cards may be preferable since you need enough money in your account to cover your expenses, so you won’t risk building more debt.
Be creative with gift giving
Many people enjoy creating their own gifts, and the recipient often treasures these homemade presents because they know how much thought and effort went into them. Think about what each person really wants or needs, and then consider if it’s something you can make. Not only does the process let you flex your creative muscles, but you’ll also save money. Buying gifts this holiday season could be more expensive than usual since higher inflation has raised costs significantly.
If you’re looking for other budget-conscious ideas, how about the gift of time? The busy people on your list may appreciate offers like free babysitting, being invited for a nice meal or relaxing at your place with popcorn and a movie. “Experience gifts” are also gaining popularity, so consider things like organizing a family hike somewhere fun that ends with hot chocolate and sweet treats, or taking a short trip with plenty of low-cost (or no-cost) activities booked.
Remember others in need
It’s easy to get caught up in the holidays and lose sight of less-fortunate people who may not be in a position to enjoy the season. Consider taking some time from your hectic schedule to volunteer at vital places like a shelter or food bank, or participate in a holiday gift-giving initiative. You may also wish to donate money or small items to organizations that provide presents for children and families in need. You’ll feel good about helping out and your efforts will reflect the true spirit of the season.
A trusted Investment Advisor can help you create a manageable and practical budget this holiday season. Find an advisor near you.
This article is a general discussion of certain issues intended as general information only and should not be relied upon as tax or legal advice. Please obtain independent professional advice, in the context of your particular circumstances. iA Private Wealth Inc. is a member of the Canadian Investor Protection Fund and the Investment Industry Regulatory Organization of Canada. iA Private Wealth is a trademark and business name under which iA Private Wealth Inc. operates.