The holidays are almost upon us, and many people have already started shopping for the season. But between hosting dinners, buying gifts, giving to charity, and travel or other entertainment, this time of year can be costly. In fact, Canadians plan to spend $1,442 on gifts, travel and entertainment this holiday season, according to a PwC study. That’s up 2% from last year.
A cash flow plan can help you manage your spending, and ensure you stick to a budget. And by using an app, like Winton, you’ll get a weekly spendable amount. So you can see what’s safe to spend at any time of day.
Aside from following a recommended spendable amount, there are other practical tips that can help you stay on track so you don’t overspend and derail other financial goals. Read on to learn more.
1. Make a list (and check it twice) 📋
It may seem like a no-brainer to have a list that includes all of the purchases you plan to make this month. However, getting caught up in the festive spirit is all too easy when you’re shopping. The hustle and bustle in stores, sales racks, and holiday decor can be distracting. You may only plan to buy five items, and end up with a trunk full of shopping bags. This extra spending will cost you. You may have to scale back on other planned spending this season, or worse, rethink some of your short- and long-term financial goals.
So it’s important to make a list of everything you plan to buy this season. And create separate categories within that list. For instance, if you plan to host a holiday dinner, list all of the items you need to purchase to make that happen, including food and decor. If you plan to donate to charity, list all of the donations you plan to make. If you plan to travel, itemize each expense, including travel tickets or gas, accommodations, food, and entertainment while on holiday.
2. Be mindful when shopping 🛍️
If you didn’t take advantage of Black Friday or Cyber Monday sales this year, don’t fret. But be sure to mark your calendar for next year so you don’t miss out, as these two dates are the biggest sales days prior to the holidays.
You can still take advantage of other sales. Check for sales online, or ask for price matching at stores. Some stores might even offer discounts if you buy items in bulk, like stocking stuffers, or disposable plates and cutlery if you’re hosting. And you can even set price alerts on your phone for specific products, like the latest gadget that you want to give to a loved one, or a toy for your child.
By doing your research, you can save yourself time, money, and be more prepared.
3. Use cash (or a separate account) 💸
The word cash might still sound icky post-Covid due to the amount of germs that are exchanged hand to hand. However, it still is a smart way to save money and ensure you don't overspend. If you leave the house with a certain amount of cash and no cards, you’ll know when you're about to run out and have hit your spending goals that day.
Another idea is to set up a separate account, specifically for holiday spending this year. You can check it daily so you know how much you have left to spend. Once you drain that account, you're done spending this season.
4. Rethink how you use credit cards 💳
Be wary if you’re putting all expenses on your credit card. It’s easy to overspend when you’re simply swiping and not following a limit. If you do plan to spend on your credit card, consider setting up mobile alerts on your credit card app. These push notifications will alert you any time a purchase is made. You can even set it up so you only receive the alert when the purchase is over a certain limit, like $200. Even better, you can pay off your card as you continue to shop. Set up a daily or weekly reminder to check in on your card, and pay it off using the funds you’ve set aside in your separate holiday spending account.
And if you’re shopping online, don’t save your credit card details on your phone or browser. The extra few minutes to manually type out your credit card information might give you a chance to rethink the purchase, and whether you actually need it.
5. Consider a holiday gift exchange or group donation 🎁
If you’ve got a large family or group of friends, consider setting up a holiday gift exchange. This way, you only purchase for one person, instead of several. A site like Elfster is easy to use. Simply have everyone input their emails, and the host fills out details like the date and location of the exchange. Then, the host sends out virtual invitations to everyone, and attendees will be emailed the name of the person they are buying for. They’ll also have a chance to fill out wish lists prior to the exchange.
Another idea for a large group is to pool money together and consider donating to an agreed upon charity, instead of buying individual gifts for everyone.
As you gear up for the holidays this year, be mindful when spending so you aren’t hit with any unwanted financial surprises later on. Stick to a spendable recommendation, and create a plan for smarter spending. Have a safe and happy holiday season!
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- Spending and cash flow
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- Saving and investing
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- Holiday spending
CacheFlo is a financial education company that builds eLearning and tools to help financial professionals and individuals make behaviour-based changes, which allows them to get more life from their money. We want to make it easier for people to predict the impact of their financial choices before they make them.
About the Certified Cash Flow Specialist (CCS) program
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About the Financial Capability Program (FCP)
The FCP combines quick and practical lessons with tools, including Winton, which helps people make financial changes they can stick to. Users can apply what they've learned to their financial situation, thus bridging the knowing-doing gap. The goal of the FCP is to help people get more life from their money.