Ah the holidays! We all look forward to spending quality time (arguing) with family and friends and totally, utterly overindulging in food.
But while many of us may be worried about increasing our waistline over Christmas, what we should be equally concerned about is increasing our debt load. A recent 2017 Canadian Holiday Outlook study by PwC shows that, on average, Canadians are planning to spend approximately $1,507 this season. About half of that amount will go to presents, while the rest is expected to be spent on travel and entertainment. And, unless you’re planning on being reimbursed by Santa, all that extra spending money has to come from somewhere.
But the gift-giving season doesn’t have to result in taking out a second mortgage. With a bit of forethought and planning, you can enjoy a very festive and full Christmas on a budget. Here are seven Christmas money saving tips that will help ensure you don’t have to spend the new year digging yourself out of a financial hole.
1. Figure Out Your Budget
Sorry to break it to you, but doing Christmas on a Budget actually means you’ll have to spend some time, well, making a budget. In an article published by Global News, Scott Hannah, head of the Credit Counselling Society, suggests that a smart holiday shopping budget is 1% of your annual income before taxes.
2. Make a List and Stick to It
It apparently works for Santa, so why not you? It’s way too easy to make impulse purchases when you’re at the mall, humming along with holiday tunes and taking in the faint smell of gingerbread in the air. The best way to ensure that you’re saving money on Christmas presents is to write out exactly what you plan to buy and how much you plan to spend on each person on your holiday list. Which brings us to our next tip…
3. Track Your Spending
There’s nothing like seeing something in writing to make it a reality. Just thinking that you’re spending “about $50” on uncle Bob and “under $200” on Mom is not going to help you keep your spending in check. You’ll probably overspend if you don’t have a firm idea of what you’re spending in the first place.
Be meticulous; take a few minutes to tabulate your total expenses at the end of each shopping trip. More often than not, when you write your expenditures, you’ll discover that you’re spending more than you think, which could be the wake-up call you need to keep your hand off your wallet.
4. Manage Your Time
A rushed shopper is a wasteful shopper. Seriously, repeat that axiom to yourself every time you go out to buy something. You’ll be much more prone to go over budget if you wait until the last minute to do your shopping. When you’re pressed for time, you’re also more likely to skip comparing deals and just get whatever is most convenient (translation: more expensive).
5. Saving Money on Christmas Presents Takes Research
Like it or not, getting Christmas gifts on a budget means finding out who has the best deals, so you’ll have to spend some quality time with your computer and those flyers you would normally just leave sitting in your recycling bin. Prices can vary widely online and at stores, so it’s definitely worth the effort to comparison shop.
6. Exploit Your Own Rewards
It’s time to re-gift all those unused gift cards you have sitting around. Just because you couldn’t use a $100 dollar gift card to Pretzel Barn doesn’t mean someone else can’t. And what about all those credit card reward points you’ve been amassing? Check out your credit card issuers’ rewards catalogues to find gifts for loved ones. For example, the BMO rewards catalogue features a lovely Gucci Guccissima women’s dress watch for 166,000 points that would look fantastic on any woman’s wrist, including mine (hint, hint).
Or take a look at the Amex membership rewards catalogue. Among the selections is a Tumi Tegra-Lite Max International Expandable Carry On for 100,100 points—perfect for the jet-setting friend (who just might decide to take you along).
7. Get Cash Back
Another great Christmas shopping tip: make giving to others a gift to yourself. Using a debit card for your shopping doesn’t yield any savings, but the right cash back card can. And remember: not all cash back cards are the same. Some credit cards give high cash back rates, but only for very specific purchase categories like restaurants. This might suit you for most of the year, but it’s not necessarily useful for Christmas shopping. Here are a few cards that offer cash back in categories you can use for buying presents.
The TD Cash Back Visa Infinite has a limited time offer (expires March 1st, 2018) that nets you 6% in cash back (up to $210) on all purchases you put on the card in the first 3 months. Plus they reimburse the first year’s $120 fee.
The New SimplyCash Preferred Card from American Express gives 5% cashback (up to $300) for purchases you make in the first 6 months.
Scotia Momentum Infinite Cash Back grants cardholders 5% cash back during the first 3 months (up to $150). The card then offers a regular cash back rate of 4% on specific categories like groceries, which is perfect for those holiday dinner parties.