by Melanie Buffel, BA Psych
Once upon a time, I used to dread the coming of the holiday season. Don’t get me wrong, I love the traditions surrounding Christmas; the gingerbread house, the tree and all the family cheer.
What I dreaded was the need to squeeze hundreds of extra dollars from my December paycheque to fund these traditions; not to mention gifts worthy of childhood expectations, fueled by the media and peers’ determining what was new, cool and absolutely necessary!
Now you may be saying to yourself, “Why is she talking about Christmas in July?” Well, I will tell you. Back in those days I would manage the holiday season with the help of my best friend, VISA. I was convinced this was exactly what VISA was designed to do – pay for things that I could not afford! After a couple of years of this same strategy and an ever present VISA balance, I decided things needed to change. I learned my lesson – a little planning ahead can help me survive the holiday season without a painful credit card hangover. This is how I did it:
First, I made a list of all the people I wanted to buy gifts for and how much money I would spend on each. (download our Gift Worksheet) I considered this list carefully with an eye to not only reducing my costs, but also considering what sort of gifts would be most meaningful to each recipient.
Then I did the following:
- I reduced the focus on ‘stuff’ and opted for one really cherished gift and a stocking full of practical items instead of a bunch of little things my kids didn’t need and may not even want.
- I shifted to buying one gift for a couple or family instead of individual gifts.
- I began to give many people on my list a specially prepared gift basket with homemade jams, jellies and cookies that were specific to their individual tastes, and far more appreciated than less personal store bought items.
- I also considered the costs of extra activities and an increase in the food budget for the month to account for the extra hosting duties.
By starting this planning months ahead, (like July – or better yet in January – well maybe next year!), you can incorporate these expenses into your regular monthly spending instead of running around in a panic in December.
How do you figure it out?
- Total up your Holiday expenditures
- Divide by the number of months before December arrives. For example, if you plan to spend $600 at Christmas and there are six months to go you will need to save $100 a month to have a debt free Christmas.
- Start saving that amount each month
Sounds simple! It can be, but the key to success is to put it into action by opening a separate no fee savings account and labelling it “Christmas”, “Hanukkah” or “Gifts” (check out the options at your bank or try one of the online banks like Tangerine or Ally). Treat this savings like a bill by setting up an automatic transfer to the account on the same day each month soon after you get paid. Don’t attach this account to your debit card so you won’t be tempted to spend it on unrelated impulse purchases. By the time the holidays are here you can transfer the money to your chequing account so it’s easily available.
This bit of savings magic can help make the season a lot less stressful and maybe even a little more magical! For our family it means the focus of our holidays is once again on spending time with people we love instead of hitting the mall, and we are all the richer for it!
