Identify expenses, cut costs, find ways to save, and be creative. Make memories not mountains of bills.
Q: Spending for the fall season worries me and I’m not sure what to do. We have a lot of family birthdays coming up and then comes the holidays. I tend to overspend at this time of year and then stress over my bills until next year at this same time. There’s got to be some way that I can buy the gifts and then manage what I need for Christmas and winter holiday fun with my family. I’m in my late thirties and go home for the holidays because it’s really the only time all of us siblings get to spend together. I have a decent job but my bills take up most of my paycheques. What can you suggest? ~Brenda
A: Saving for special occasions such as birthdays, a family vacation, Christmas, or holiday fun can feel like a daunting task, especially when everyday expenses consume your budget. However, starting your planning process early and getting ahead of a cash — or more realistically — a credit crunch, can be as rewarding as it is challenging. The trick is to find ways to cut costs and set money aside to afford life’s special events and celebrations without stress. This is the perfect time to start planning, so with that in mind, here are some practical tips to help you get started.
The impact of stress on spending
Before planning how to manage your upcoming expenses and the winter holiday season, it’s crucial to understand the often-overlooked impact of stress on your spending habits. Stress and spending can quickly become a harmful cycle. As stress levels rise, people tend to spend more, leading to higher bills and even greater stress. Under stress, making sound financial choices becomes harder, often resulting in compromised decision-making. This can lead to less thoughtful spending choices and emotional or impulsive purchases, further increasing the bills. Additionally, stress can hinder your ability to save and budget, exacerbating an already difficult financial situation. To break this cycle, it’s essential to plan in a way that helps you manage your money while also keeping your stress in check.
Identify what you plan to spend
To effectively manage your expenses, begin by making a list of your anticipated costs. Jot down the birthday gifts you plan to buy and the holiday expenses you think you’ll face. Reviewing last year’s credit card bills, bank statements, and even your calendar, smartphone photos, social media posts, or text messages can help jog your memory. Aim to make your list as detailed and specific as possible, covering areas such as flights, food, entertainment, gifts, recreation, outfits, and special events.
Next, beside each expense on your list, estimate how much you plan to spend on each item. As it’s often simpler to budget for birthday presents than for an entire holiday season, take your time to map this out. Also, with the temptation of mid-November, pre-Black Friday sales, be honest about any items you may want to treat yourself to.
Double-check your list
Once you have a solid list, double-check it against your calendar and your list of family and friends to ensure you haven’t missed anything. For instance, if your annual ski trip with your siblings isn’t booked yet, include it with an estimated cost. If you anticipate needing hosting gifts for friends, add those expenses even if you don’t know exactly who they’ll be for. After finalizing your list, calculate the total expected cost. If the total seems more than you can afford, don’t worry. Starting early gives you the flexibility to adjust your plans and manage your budget effectively, reducing stress and avoiding debt.
Tips to afford holiday expenses
When faced with an expensive holiday or gift list, many people consider crossing off people or events as their first option. However, this can lead to emotionally charged decisions and feelings of obligation. Starting your planning early offers a great opportunity to discuss alternative gift-giving or event options with family and friends. For instance, if you have a large family and need to buy gifts for everyone, suggest a gift exchange this year. Alternatively, instead of one family bearing the cost of food for a special holiday, propose a potluck. With living costs high for everyone, buying fewer gifts and spending less could be the time and money saver everyone needs to start the new year without holiday debt.
To save on event costs, start by asking participants about their loyalty points. Plan your events around redeeming these rewards, pooling points so everyone can join in. For many families, the time spent together is what matters most. Instead of buying gifts, consider purchasing plane tickets or paying for experiences to ensure no one is left out. By planning early, you can take advantage of pre-booking discounts or shop around for the best deals. Although finding the right offers may take time, planning up to three months in advance provides the extra time you need to secure the best options.
Alternative gift options can be a budget saver
For those who seem to have everything, consider offering your service instead of another item. Help them with a chore on their to-do list or invite them to share an experience with you. Giving your time is often the most valuable gift you can offer to a senior, a busy parent, or a loved one of any age.
One of the benefits of choosing alternative gifts is the ability to manage your spending more effectively. Options like subscriptions — for example, emergency roadside assistance for a new driver — donations to a favourite charity, homemade gift certificates for experiences, or monthly contributions, such as to a child’s RESP, allow you to distribute your expenses over time. This way, you can avoid adding another charge to your credit card during a costly season.
Back to the basics of budgeting and saving for special occasions
Budgeting and saving for special occasions typically involves several steps. First, determine your spending needs and set a savings goal. You might need to temporarily cut back on regular expenses and look for ways to boost your income. It’s helpful to put the money you save into a separate account to ensure it’s available when needed. Another approach is to work backward from your goal: divide the total amount you need by the number of paycheques you’ll receive before the event. This will show you how much you need to save with each pay. Remember, having even a simple plan is better than none at all.
However, a traditional approach to budgeting might not work for everyone, especially if you’re just starting out. It can be stressful to figure out how to get the money you need without depending on your credit cards and chalking up debt. Don’t get discouraged if you need some help. To find extra cash, start by looking online for ways to temporarily cut your daily expenses. This could mean skipping events with expensive tickets, reducing personal shopping, pausing subscriptions and services you can live without until after the holidays, or planning meals so you can cook at home instead of eating out.
The bottom line on planning your holiday spending
Seeing a loved one stressed about money can be hard, so don’t hesitate to ask friends and family to support budget-friendly choices this year. Whether it’s birthdays, seasonal holidays, or special occasions, these events should be enjoyed to the fullest. By planning early, you can ensure that financial worries about a lingering debt hangover don’t overshadow the joy of your celebrations.
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