Oh, what a Christmas. Exchanging gifts with family, feasting on delicious food, and bringing in the new year with sparkling cheer. Did you also get together with long lost friends and celebrate overdue meetups? Maybe you decided to get your boss something nice and reach out to neighbours with homemade goodies with the finest ingredients.
Did you buy a new bathing suit to go with your new luggage for a trip you just booked? Did you get one more gift for the kids because you thought it wasn’t quite enough at the last minute? An impulse purchase never hurt anyone, right?
The unexpected guests, a change of plans, a turn of events – all the little extras quickly add up.
Did you blow your budget? Did you have one? Here’s what you can do now, so your next Christmas is worry free and affordable.
Even the best credit cards in Canada can’t save you from January’s bills of the December purchases you made. Every year, we stretch a little more, give a little extra, but as we try to set new year’s resolutions for something like our health, the thought of affording a gym membership might be a bit daunting.
A resolution to make yourself better happens slowly. Do little bits at a time. Small, repeatable habits can lead to significant change, but if you’re stressed about finances, it might hold you back.
It’s time to look back at what you spent on Christmas. What’s on the credit card bills? How many times did you say, “It’s the holidays! Just buy it.” I’m not saying you did wrong, I’m asking us all to be more realistic. Here are some quick things to look at:
- Food – Look at a grocery bill from November vs. December. What was the overage? All the potlucks, the bottles of wine you brought to dinner parties, the fancy cheese plate you brought for an appetizer – how much did it all cost you? Then, how often did you dine out or have food delivered because you were too busy making cookies and gingerbread houses?
- Gifts – how much did you really spend? Gifts for kids, parents, siblings, neighbours, teachers, daycare workers, dog walkers, favourite baristas – whatever you bought for whoever entered your mind this holiday season – it’s essential to count it all.
- Travel – Did you spend more on taxis and uber’s? How much did you spend on parking? Did you spend a little extra on gas to get you to that unique store on the other side of town? Or the drive out to a small town to see extended family?
- Beauty – Did you tip your hairdresser after they squeezed you in for a last minute appointment? Did you do a little more than a cut to dazzle someone special? Did you buy a new outfit for a holiday party?
- Other – Did you take the kids to a Christmas movie at the theatre or a special excursion to a waterpark?
Look to find all the little extras and add them up. A few years ago, my wife and I only budgeted for gifts we knew about – kids and family. Needless to say, the money we had set aside, we burned through before we even started shopping.
Set your new budget
Ok, you took the time and added it all up. Were you surprised? Would you have done anything differently? There may be some buyer’s remorse but, ‘tis the season of giving. There are also last minute get together’s that hadn’t been accounted for which cost me a little extra. I had a friend text me after Christmas whom I hadn’t heard from in a while. We got together, and it turned into a $100 evening. I don’t have regret, it was a good time, I just didn’t plan on spending the money.
With all this in mind, whatever all those bills add up to, it’s worth it to add a little bit more. Another 10% will go a long way to make you feel at ease going into the next holiday season and setting you up for success in 2019.
Start your Christmas savings now
Whatever your new budget, divide it by 52, and remember that amount. Set up an automatic savings plan that withdraws that amount from your chequing account and put it into a high-interest savings account or even a TFSA. Don’t touch it until December, for now just let it accumulate. If you put $25 a week into a savings account with 3% interest, by the end of the year, you’ll have over $1300 to spend on the holidays.
The holidays can be stressful, but setting aside money now and throughout the year will make for a worry-free Christmas and a great start to the next year ahead. Looking back on 2019 with smart savings goals will give you clear vision for 2020.
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