As Canada's population ages, the country is facing a looming financial crisis that doesn't garner…
The holidays are meant to be a time of happiness, celebration, and togetherness, but from a financial point-of-view, they can be difficult to manage and straining. If you don’t want to spend January worried about bills because of spending in December, it pays to focus on a financially sound holiday. These tips for a fun and frugal holiday don’t take away from the benefits of the season, but they do help you reign in some of your spending.
Creating Your Holiday Budget
The first step in every situation is to create a holiday budget. This is what you need to stick with in order to create financial health in the year to come – long after the holidays have passed. While you may want to focus on fun activities, you need a starting point. Here’s where to begin.
- If possible plan early. Save as much as possible so you can use cash to pay for your holiday needs. This can reduce your costs significantly compared to borrowing on credit cards.
- Determine how much you wish to spend this holiday season. Put a specific figure down on paper. Then, challenge yourself to stay within this goal.
- Make sure everyone is on the same page when it comes to holiday spending. This includes everyone in your home and your extended family.
- Focus on your budget with a goal of minimizing debt. That is, what can you spend this year without increasing your debt burden for next year?
- When making larger purchases, always consider the impact on your budget long term. If it is a big purchase, be sure you wait at least 24 hours to make the buying decision. That gives you more time to make sure it is the right decision.
Take a few minutes to consider your budget. What could you do and feel good about? While loans may be available to help stretch your spending, you also want to be sure you don’t struggle next year to repay that debt.
Tips for Holiday Hosting
Are you the host of a variety of holiday events? This can be financially difficult. But, with a few inexpensive holiday party ideas like these, you can significantly reduce your overall costs.
- Bring people together in a single holiday event instead of hosting several parties for each side of the family. Not only does this cut down on costs, but it also allows people to get to know each other.
- Get people involved in the process. One of the most expensive components of events like this is food. Put each person in charge of one item. Even if you handle the larger components, such as the protein, having everyone contribute one item can make it easy to plan.
- Cut down on the details, too. For example, you may want to avoid purchasing paper and plastic and instead use the dishes you have (even if it is an eclectic collection of mismatched plates). You may want to send digital invites instead of paper ones to reduce costs, too.
- Ask everyone to bring a bottle of wine. Instead of having to spend a significant amount on wine, ask everyone to share their favourite.
- Keep dessert simple. This is another area where costs rise quickly. You can reduce those costs by focusing on bite-sized desserts or just one cake instead of numerous options.
For holiday hosting, your goal should always be to bring people together in the most appropriate manner possible. Seek out simple ways to reduce each of the costs you have throughout any event. Keep your event simple to benefit the most.
Tips for Gift Buying Success
For a frugal holiday, zero in on ways to cut costs related to gift-buying. Everyone wants to buy the perfect gift for each person. This year don’t ask what they want. Instead, buy something you want to give them. Make it meaningful, but not necessarily expensive. How can you make this work?
- Set a budget for each person. Place a specific amount on paper that you will spend on that individual. Then, stick to this goal. Challenge yourself to find a way to buy a meaningful gift for less.
- Avoid buying for every extended family member. Instead, consider a gift exchange. Everyone buys for one other person. Set a dollar amount to stick with for gifts.
- Everyone may agree to keep costs down. Sometimes, just opening this conversation is enough to encourage everyone to buy with frugality in mind. Discuss the benefits it offers everyone when costs are kept lower.
- Give experiences rather than expensive gifts. Could you give a gift focused on an experience that individual will have with you (or even on their own)? A group of people could come together, for example, to give a couple a weekend trip to a cabin for much less than each person buying gifts.
- Limit the number of gifts you give even to children. In some families, the focus is on a simple plan. Give something each child wants, something he or she needs, something to read, and something to wear.
Focus on a frugal holiday that’s in your budget. That way, when January rolls around, you still have a budget in mind to help you and your family continue to do fun things together.
This year, focus on the fun of the holiday season. Find free things to do with your family such as concerts, lighting events, community events, and religious celebrations. Instead of going out to an expensive dinner together, meet in a neighbourhood with numerous light displays to walk around together. Instead of a drinking party, make it a hot chocolate party and tell stories from previous years. In short, you don’t always have to focus on spending a lot of money to have an enjoyable holiday. What can you add to these tips for a fun and frugal holiday?
Photo by Samuel Holt on Unsplash