Avoid a Financial Hangover in January: How to Stick to Your Holiday Budget

If you’re starting to think about holiday spending, it’s essential to keep a few things in mind so you don’t fall into the seasonal debt trap. If you use your resources to save money on gifts, you won’t be overwhelmed when the January bills start to pour in. Here’s how to plan a stress-free and debt-free holiday.


HAVE A PLAN. By this time, you probably have a good idea of who you will be hosting and getting gifts for over the holidays.


Step 1: Determine how much money you have set aside for the holidays or that you can find in your budget when you deduct your regular expenses from your income. That becomes your total spending limit for the holidays.


Step 2: Make a holiday budget in writing, excel and/or online budget templates and calculators. Decide how much of your total limit will be spent on each category, such as presents, cards, wrapping paper, donations, decorating, travel and entertaining.


  • There will always be some expenses you didn’t count on, but big-ticket items for family members can be planned and budgeted for.
  • Make sure you include everyone you normally get gifts for – family, friends, your children’s teachers, etc.
  • Be careful about entertainment expenses – gifts for party hostesses and providing food and drink for surprise visitors can be easily forgotten in a budget but quickly add up. Read up on tips for how to host a party on a budget to stretch your entertaining dollar.


TRACK YOUR SPENDING. The key to ensuring you don’t spend more than you budget is to track every purchase and keep your budget updated.


Step 1: For each category in your holiday budget, make a list of what you need to buy and what you can borrow or make with what you already have. For each item you need to buy, your list should also show the maximum price after taxes that you can spend to stay within the total limit for that category. It is easy to buy on impulse or overspend, so always have your list with you for every purchase and make sure you stick to your spending budget.


Step 2: As you purchase items from your list, cross them off and subtract the amount from your budget. This ensures you’ll always know how much money you have left in your budget, so you don’t go over that amount.     




  • Cash in your rewards. Don’t forget credit card rewards that can be mighty useful when applied toward gifts.
  • Check your drawers for unused gift cards that can be passed along or spent on purchases.
  • Take advantage of free shipping, which many stores offer at this time of year.
  • If you find a great two-for-one deal, see if you can gift the same thing to two different people on your list.
  • If you find that you’re overspending, remember there are other ways to cross gifts off your list. Check your cupboards for leftover presents from last year and consider regifting presents you received but never used. If your gift cupboard is bare, try bartering things you don’t need for gifts you would like to give using an online site like BUNZ, or a neighbourhood Facebook page. It is amazing what will be offered to you after you post a request or offer to barter something of your own.


GET CREATIVE. The holidays are a time to show how much you care for those who are important to you. You can do that in ways other than by spending a lot.

  • Are you crafty? What about making loved ones a gift? Maybe you can knit or sew – gifts that take time and show effort are likely to be more appreciated anyway.
  • Time is worth more than money. Consider giving your services in some way. Offer to babysit, run errands, walk a dog, do some housekeeping, cook dinner, or volunteer as a family rather than buying gifts for one another. Start a Secret Santa tradition. That’s when your family, co-workers or group of friends draw random names and then you buy just for the person that you have drawn. That cuts down on how many people each person has to buy for.    






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