Before the Holiday Spending Starts: Make a Plan Your January Self Will Thank You For
It might feel a little early to start talking about holiday spending.
The decorations aren’t up yet. The shopping hasn’t really started. And most of us aren’t thinking about what our credit card statement will look like in January.
That’s exactly why I think October is a good time to have this conversation.
The holidays should be something we look forward to. Time with family, traditions, good food, giving to people we care about and, hopefully, a little time to slow down.
But there’s also a financial side to the holidays that can be easy to overlook until we’re right in the middle of it.
Gifts are only part of the cost. There can be travel, dinners, entertaining, decorations, school events, work parties, charitable giving and all those little purchases that don’t seem like much individually.
By January, they can add up to much more than we expected.
A little planning now can help you enjoy December without spending January wishing you’d done things differently.
Start With the Whole Holiday, Not Just the Gifts
When people think about a Christmas budget, the first thing that usually comes to mind is a gift list.
That’s important, but I encourage you to think a little bigger.
What do the holidays normally look like for you?
If you’re hosting Christmas dinner, there may be additional groceries and drinks. If family lives outside Winnipeg or elsewhere in Manitoba, there could be travel costs. Maybe you attend a few holiday events, buy new outfits, participate in a workplace gift exchange or spend more on restaurants because December gets busy.
None of these things is necessarily a problem.
The challenge is when we don’t account for them.
Take some time now to make a realistic list of what you typically spend money on during the holiday season. You don’t need to know every dollar. You’re simply trying to see the whole picture before the spending starts.
Decide What You Can Comfortably Spend
Once you have an idea of what’s coming, decide what you can reasonably afford without compromising your regular financial commitments.
That’s an important distinction.
A holiday budget shouldn’t be based on what you’d like to spend if money weren’t a consideration. It should fit alongside your mortgage or rent, groceries, utilities, debt payments, savings and all the other things that will still need to be paid in December and January.
If the number you arrive at is lower than you expected, that’s useful information to have now.
You still have time to adjust.
Start Setting the Money Aside Now
One advantage of planning in October is that you have a little time on your side.
Rather than trying to absorb the entire cost of the holidays from one or two December paycheques, consider putting some money aside each payday between now and then.
It doesn’t have to be a large amount.
Having even part of your holiday spending already saved can make December feel much easier.
And if this approach works for you this year, you might consider starting a dedicated holiday savings fund for next year. A small automatic contribution throughout the year can make a surprisingly big difference by the time the next holiday season arrives.
Make Your List Before the Sales Begin
November will bring Black Friday, Cyber Monday and a lot of messages telling us we need to buy something right now.
Before that happens, make your list.
Who are you buying for? What would you like to spend? Are there gifts you’ve already decided on?
Having a plan doesn’t mean you can’t take advantage of a good sale. It simply gives you something to measure that sale against.
If something is 40% off but wasn’t something you intended to buy, you’ve still spent 60%.
Sometimes the best question is simply:
Would I buy this if it wasn’t on sale?
We’ll talk more about that next month.
Be Careful About Making January Pay for December
Credit can make holiday spending feel easier because the cost doesn’t always feel immediate.
But the holidays eventually end. The payments don’t necessarily end with them.
If purchases go onto a credit card that can’t be paid off when the statement arrives, interest can make those gifts considerably more expensive over time.
The same principle applies to Buy Now, Pay Later arrangements. Breaking a purchase into smaller payments may make it feel more affordable, but those payments are still commitments against future income.
Before using either, ask yourself whether you’re comfortable with the purchase becoming part of your January—or February—budget.
Spend More on What Matters, Less on What Doesn’t
A budget isn’t supposed to take the enjoyment out of Christmas.
I think it can actually do the opposite.
When you decide ahead of time what’s important, you can spend intentionally on the things you really value and worry less about everything else.
Maybe your family loves a big Christmas dinner.
Maybe travelling home is the priority.
Maybe gifts are a big part of your tradition.
Or maybe what everyone remembers most is playing games around the table, baking together or going for a walk after dinner.
Your holiday doesn’t need to look like anyone else’s. That’s true of financial planning in general, too.
Give Your January Self a Little Kindness
January has a way of bringing us back to reality. The decorations come down, regular routines return and the credit card statements arrive.
Imagine reaching that point knowing you enjoyed the holidays and stayed within a plan that worked for you.
That’s the goal.
Not a perfect budget. Not spending as little as possible. And certainly not feeling guilty about enjoying your money. Just making thoughtful choices today that you’ll still feel good about tomorrow.
If you’d like some help looking at your spending, savings or financial goals before the holidays arrive, I’m always happy to have that conversation.
— Samantha