Money & Career

How to make and stick to a holiday budget....really

A five-step plan that will save you a financial hangover in January


Noisy stores. Bone-crunching crowds. No parking space at the mall. It’s enough to make anyone want to just slap down a credit card and buy something – anything – before hightailing their way back to the car with an armful of pricey gifts sure to leave a financial hangover come January.

Sound familiar? We spoke to Henrietta Ross, CEO of the Canadian Association of Credit Counseling Services to get her advice on how to turn a naughty Christmas budget (or complete lack thereof) into something a little nicer.

Step one: Map it out
Rather than opting for scattershot shopping, Henrietta Ross, CEO of the Canadian Association of Credit Counseling Services, urges us to make a holiday shopping list instead. “There are a lot of holiday expenses we take for granted,” she says. So think hard about your spending and make a complete list of everything you expect to buy.

What items should be on your holiday budget? Here’s a list to get you started: gifts, cards, gift-wrap, postage and shipping costs, indoor and outdoor holiday lights and decorations, party invitations, food for party, alcohol, flowers, baking supplies, holiday tips/gifts, hostess presents, eating out, new outfits and jewelry, dry cleaning, travel expenses (including extra gas), charitable donations

Step two: Find the cash
This step can be a tough one if you haven’t already been saving up for the season, but it’s important to know how much money you can really afford. In other words, ask yourself, “Where will I get the money to pay for all of this?” If you’re turning to credit cards, money you don’t actually have, it’s time to rethink your list. Maybe you can get away with the same dress you wore to last year’s party and jazz it up with a new necklace. Or nix the cards and stamps and try out Paperless Post instead. (First-timers get a free stash.) Overspent on party food? Don’t panic. Adjust your budget and tweak your spending on, say, baking supplies.

Step three: Allocate the fun
Or, make that funds. It’s a system that works for Suzanne Ethier, a real estate stager in Kitchener, Ont., who sits down every year with a cup of coffee and maps out who will be getting what. Not only is she less likely to over-spend, her time at the mall is less hectic. “It makes the shopping experience much more manageable when I know exactly what stores I need to target to get the specific items I want,” she says.

Step four: Get shopping
There are a lot of ways to slice added expenses at the till. Wait until Christmas cards go on sale, or stick to kid-made holiday wrapping, for instance. Jean Mills, a teacher and author from Guelph, Ont., uses another tactic to keep her spending in check. “I pay with cash, not credit. It’s amazing how careful you become when handing over the real (not plastic) stuff,” she says.

Step five: Stop when you’re done
Crossed all your purchases off your list? Then stop spending, get out of the mall, and don’t go back. “Last minute impulse buys can end up being all that you buy if you’re not careful,” cautions Ross. So suppress that urge to buy “just one more thing for the kids” and go home. You’re done.