Sandra Fry: Let your budget be your guide and make financially appropriate gift-giving choices your new normal
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Christmas is a month away and if you’re like a lot of people, anxiety about your finances and how to afford the holidays is outweighing how much you’re looking forward to the festivities.
Making the situation worse is that many retailers are offering deep discounts to entice shoppers who have spent less than anticipated this past year. However, even when money is tight, it’s still possible to plan a meaningful holiday.
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To start, take one hour to outline a plan. Sit down for coffee with your spouse or grab a best friend who also wants to create a four-week holiday plan. Work together to help each other identify what’s most important. Consider everything from traditions, food, decorations and how to spend the weeks around the big day, to specific activities, gift-giving habits and the simple pleasures that make your holidays special.
Every family has those non-negotiable traditions that everyone looks forward to, so it’s those you want to prioritize when money is tight. However, it’s not worth honouring a tradition that will blow your budget. Look for ways to make those traditions more affordable — for example, rather than supplying all the food for a seasonal open house, turn it into a potluck or cookie exchange. For traditions with larger price tags, such as ski trips, make them part of your family’s gifts.
Just like Santa, be sure to make a list of who you need to buy for. Jot down any ideas you have for their gifts and an approximate amount you think you need to spend. As you add names, think carefully about whether you need to buy a gift for that person. Even though they might be important to you, there are ways to show affection or appreciation without spending money on a gift.
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For example, if it’s someone you’ve typically exchanged gifts with each year, connect with them sooner rather than later to propose going for a walk to look at the festive lights in your neighbourhood. If it’s someone you normally see on vacation, suggest not buying each other gifts in favour of putting the money towards an activity the next time you get together.
For a large family, if you act quickly, there’s probably still time to organize a gift exchange, draw names or set spending limits on gifts. Initiate a group chat or text to let others know that your budget won’t allow for a lot of lavish gift giving this year. Chances are, some of your family members are feeling the same way and they’ll be relieved that someone brought it up.
Four weeks still gives you time to get creative with the gifts you do want to give. For example, if you have credit-card rewards or loyalty cards, redeem points for gifts to avoid spending cash you don’t have. Instead of mailing gift cards, choose alternative gifts that allow you to spread payments out throughout the year. This could include contributing a small monthly amount to a niece’s registered education savings plan or maybe your cousin would enjoy a monthly subscription to a favourite app.
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If there’s a university student or young couple in your midst, contributions towards their tax-free savings account would likely be very welcome. Homemade gift certificates for babysitting, gardening help or companionship give the priceless gift of time. And if you’re handy with a craft or in the kitchen, pass along gifts that you make rather than buy.
It’s important to establish a holiday budget to keep yourself accountable and out of debt. Keep a running list of what you’ve bought, how much you’ve spent and where you stand in relation to what you had planned to spend. Then think about how to trim your spending to free up money you can use towards other expenses. You could cook regular meals at home for the month of December, instead of ordering in or picking up takeout. And remember to pack a bottle of water and a snack when shopping in person to ward off temptations to eat out.
Shop your own pantry and freezer and meal plan with what you already have to cut back on regular grocery expenses and leave yourself money for the holiday meal and seasonal treats. For you and your kids, trade festive outfits, holiday accessories or tacky Christmas sweaters with friends rather than buying new. Exchange holiday decorations with a neighbour, so you still get to see your decorations displayed, instead of shopping for new decor.
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This is a great year to dial back on the ever-escalating expenditures and focus on making memories, not mountains of bills. Let your budget be your guide; make financially appropriate gift-giving choices your new normal and encourage your extended family to do the same.
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Ask others not to buy for you and, instead, enter a date into your calendars for when you’ll get together to walk the dogs, go for a bike ride or catch up over dessert. Even if you won’t meet up until February, choose a specific date and time. That way, it won’t slip your minds, but will remind you that it’s not what’s under the tree that matters most, but rather those who are around it.
Sandra Fry is a Winnipeg-based credit counsellor at Credit Counselling Society, a non-profit organization that has helped Canadians manage debt for more than 27 years.
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