Canadians are worried that inflation will make it harder to buy gifts this upcoming holiday season. However, according to a recent survey by Deloitte Canada respondents said they plan to spend an average of $1,347 for their holiday expenses - marking an 11% decline from last year and a five-year low. Before you hit the stores or fill your online basket, here are a few tips for making a plan, sticking to it, and coming out in the black this December.
1. Plan ahead and set up a budget
It’s a lot harder to overspend when you’ve made a list and checked it twice. Start by creating a list or spreadsheet that accounts for all facets of your seasonal spending, from entertaining and travel to presents for friends, family, party hosts, and the office Secret Santa exchange. Do your research on gifts and prepare a shopping list, mapping out the rough costs of each item to make sure it fits within your overall budget. With everything accounted for, you’ll have a more efficient shopping experience and feel good about what you’re buying.
2. Leverage money-saving apps and websites
With your budget set and your list in your pocket, consider utilizing money-saving apps and websites that aggregate promotions and/or coupon codes for thousands of major retailers. Websites such as Finder and RetailMeNot are searchable by store, product or category, listing all applicable coupons and promo codes. Honey, a browser extension, automatically finds coupon codes and applies them when you check out.
3. Don’t be swayed into overspending by “deals”
The holiday season is awash with tactics from retailers to push you to spend more under the guise of saving money – special edition gift sets, bundles, free shipping, flash sales, or “buy 3, get 1 free” specials, for example. But the bottom line is that these “deals” won’t save you money if you end up spending more than you originally planned. Sales and promotions are probably the most common derailed, but you have a defence: your pre-planned budget, shopping list, and a little mindfulness gleaned from this list.
4. Trim your list
While it's a nice thought to buy gifts for everyone in your life, it can also end up being quite expensive once your credit card statement arrives. If you typically spend money on extended family and friends outside your inner circle every year, consider trimming your list down to the people nearest to you (immediate family, close friends). Not only will you end up spending less, but the added stress of having to buy for so many people will be drastically reduced.
My family and I have decided to embrace the spirit of giving while being mindful of our budgets by organizing a Secret Santa gift exchange with a specified maximum budget. To make drawing names easier, you can use Drawnames or Elfster. This tradition still allows us to participate in gift giving and the fun of opening presents with our loved ones without the financial strain that can come with individual gift giving.
If you still feel bad about leaving certain people out, a much cheaper way to still include them in your holiday gift giving is to bake or cook something they love. It'll likely cost much less than a store-bought gift and will have that extra-special personal touch, which leads to our next point:
5. Mix it up with non-store bought gifts
Not every gift needs to be something bought at a store. In fact, gifts of time or homemade items are often appreciated much more by family and friends. If you've got a crafty side, consider making something simple and fun to give away as holiday presents. This could be something sewn or knitted for those upcoming winter months, or a piece of art a loved one can hang on their wall to remind them of you. Get creative!
If you'd still like to spend money but can't add any more expenses to your already-bloated credit card bill, consider giving an IOU for dinner or drinks in January or February. This will still be greatly appreciated (who doesn't like being treated?) and will also give you a small buffer of time to allow for a bit of financial recovery.
6. Use a rewards card strategically to earn cash back or points
As long as you pay off your credit card balance in full every month, using a cash back or travel credit card is a great way to squeeze value out of regular spending. If you pay for gifts using a rewards credit card, you’ll earn cash back or points on the money you’ve already accounted for in your budget. But beware of the temptation to overspend — aimless and unplanned shopping is usually where extra purchases sneak in, so remember to stick to your pre-planned gift list.
7. Take advantage of your loyalty program’s e-store
Before going to the mall or directly to a retailer’s website, check if your credit card loyalty program has an e-store or online shopping portal. For example, if you have an Aeroplan credit card, you can earn bonus miles by shopping at popular merchants online through Aeroplan’s eStore, including Hudson’s Bay, Saks Fifth Avenue, Lululemon, Sephora, and Amazon.ca. The same goes for Air Miles credit cards and the online Air Miles Shop.
E-stores tend to offer bonus points and exclusive deals you wouldn’t otherwise see if you shop directly from stores. If it’s something you plan to buy anyway, e-stores can offer additional savings.
8. If you have a travel credit card, don’t redeem your points for gift cards or merchandise
Travel credit cards provide the best value when using points to book flights, hotels, and vacation packages. Most rewards programs also allow cardholders to redeem from a catalogue of gift cards and merchandise, but you’ll usually get worse value for your points when redeeming for non-travel rewards. If you have points in the bank, don’t spend them on holiday gifts – save up those valuable points for next time you go on vacation, along with the points racked up from budgeted holiday spending.
Ratehub's Director of Everyday Banking, Natasha Macmillan recommends using the Scotia Momentum Visa Infinite credit card. This card not only offers a great welcome bonus (earn 10% cash back on all purchases for the first 3 months (up to $2,000 in total purchases). No annual fee in the first year, including on additional cards. Offer ends October 31, 2024.), but it also offers 4% cash back on groceries which can prove to be a big money saver for your holiday hosting duties.
Best for Groceries & bills
based on spending $2,200/mo after $120 annual fee
- Earn rewards
1% – 4% earn rate
- Earn 10% cash back on all purchases for the first 3 months (up to $2,000 in total purchases). No annual fee in the first year, including on supplementary cards. Offer ends October 31, 2024.
- Earn 4% for every $1 you spend on grocery store purchases, recurring bill payments, and subscription purchases.
- Earn 2% for every $1 you spend on gas purchases and daily transit purchases.
- Earn 1% cash back on all other purchases with no cash back limit.
The Scotiabank Momentum Visa Infinite Card offers impressive rewards on everyday purchases. This card earns great cash back on many categories – however, its distinguishing feature is the 4% cash back on groceries. This card can help offset rising household expenses and is considered to be one of the best cash back credit cards.
- High cash back rate on essentials: Enjoy significantly higher earn rates on groceries and gas than most other cards (4% cash back)
- Comprehensive insurance coverage: Benefit from strong insurance coverage typically is reserved for travel credit cards
- Lucrative welcome offer
- Spending cap on bonus categories: Annual total spend limit of $25,000 on the 4% and 2% spending categories; thereafter, the earn rate drops to 1%
- Limited redemption flexibility: Cash back reward is only offered as a statement credit once per year in November and cannot be redeemed in smaller amounts or any other time of year