- Posted by Jon Harju
- On December 10, 2019
How to ensure your holiday budget stays merry this season
Amongst the twinkling lights and festive fun, many of us face growing holiday expenses as we pay for gifts, festive outings, out-of-town travel, holiday entertaining and much more.
When you begin to feel you’ve overspent or racked up too much credit card debt, the season of joy can take on a stressful slant and a toll on your mental wellness.
‘Tis the season to blow the budget
Recent reports claim the average Canadian’s 2019 holiday spending budget is $1,593.
- 25% say the financial stress of the holiday season negatively impacts their mental health.
- 60% don’t have a budget or are likely to overspend
- 50% of holiday shoppers say they are prepared to go into debt.
Financial security is one of the pillars of wellness, and although any stress can take a toll on your health, stress related to financial issues can be especially threatening to your mental health. Even though you might feel like you’re running out of time, take a moment to stop, breathe and strategize how to stay on holiday budget.
5 tips to help you stick to your holiday budget
1.Make a list and create a budget based on your finances
Your spending budget should be based on what you make, what you’ve saved, and what you can move around in your budget to cover the costs. Financial planners recommend spending no more than 1.5% of your annual income on the holidays. Consider making a list and looking for ways to trim and consolidate, i.e. a coordinated gift exchange so you don’t have to buy for your whole family or friend group or donating small amounts of money to children’s registered education savings plans (RESPs).
2.Ditch the credit cards and opt for cash
It may be easy to throw all your shopping purchases on your credit card, but that’s a sure-fire way to overspend and extend your financial stress by adding interest payments to the pot. Use cash or debit and be more aware of your spending, using only the funds you have available. Or if you opt to online shop, immediately transfer funds to cover the credit card charge.
3.Give personalized gifts
Avoid costly impulse shopping trips and strive to take a moment and think about what your loved ones could really use and appreciate. A small, thoughtful gift is worth more than an expensive gift that someone may never use. Consider homemade gifts for teachers such as baked goods, or a sentimental gift such as restoring old photographs for grandparents.
4.Choose a gift that gives back
A meaningful option is to make a charitable gift in your loved one’s name e. Choose a cause that aligns with their values or is already near and dear to them. Charitable contributions can offer a tax break, so keep a record of the contribution and contact the tax office for further information on claiming it on your taxes.
5.Keep track of your expenses to help with next year’s planning
Research shows that financial tracking can be a useful tool and will be handy for creating next year’s holiday budget. Once the holiday season is over, review how much you spent and consider setting aside a certain amount each month leading up to next December so
you avoid last-minute financial stress.
The greatest holiday gift
Don’t let your holiday spending become the Grinch who stole your Christmas. The greatest holiday gift you can give to your family, friends and yourself is the gift of time. Use it wisely to unwind, have fun, and reset for the new year ahead.
Download Snapclarity to complete your free mental health assessment.