Old-fashioned gifts, early planning and buying store brands: Here’s how to save over the holidays

Following a number of months of excessive inflation charges, this vacation season could also be particularly disturbing for Canadians trying to reduce on spending.

A current report revealed by Deloitte Canada exhibits vacation spending is predicted to drop 17 per cent this yr, to $1,520 per family. This is in comparison with $1,841 per family in 2021. The firm’s 2022 vacation retail outlook additionally exhibits Canadians will seemingly spend about 10 per cent much less on presents and reward playing cards this yr, for a complete of $510.

“[This is] not a huge surprise when we think about what’s happening around us,” Marty Weintraub, a associate and nationwide retail consulting chief at Deloitte Canada, informed CTVNews.ca. “We have prices rising quickly with interest rate challenges coming, [and] there’s still some supply chain issues.”

According to Weintraub, the primary cause behind this presumed pullback in spending is worry round Canada’s present financial local weather. About 41 per cent of these surveyed by Deloitte Canada mentioned their family funds have declined this yr, whereas 48 per cent mentioned they count on the financial system to worsen in 2023. This comes as economists from the Royal Bank of Canada predict the nation will enter a recession early subsequent yr.

“We have a looming economic downturn,” Weintraub mentioned. “[Based on] public sentiment and the messaging we’re looking at, it looks like it’s going to happen … and that drives anxiety even higher.”

It may also create some rigidity for these desperate to have fun the vacation season after years of COVID-19 public well being restrictions, mentioned Anne Arbour, a monetary educator with the Credit Counselling Society.

“There’s a desire to … get out there, to spend and to have a good time again,” she informed CTVNews.ca. “But there’s also the reality of food and gas … costing considerably more.”

Weintraub and Arbour are two of a number of specialists who spoke with CTVNews.ca about how Canadians can reduce on spending this vacation season. Whether internet hosting family and friends members, or buying presents for family members, under are some tips about how one can benefit from the vacation season with out breaking the financial institution.

CREATING A HOLIDAY BUDGET

In order to restrict spending this vacation season, Canadians ought to begin by figuring out their current cash-flow state of affairs, mentioned Kelly Ho, a licensed monetary planner with DLD Financial Group Ltd. primarily based in Vancouver.

This includes figuring out obligatory bills – non-negotiable funds equivalent to those who go in the direction of housing, transportation and debt, for instance – and discretionary prices, in addition to the sum of money saved on a month-to-month foundation.

From there, will probably be simpler to put out a vacation finances primarily based on what they’re comfy spending on presents, meals and different bills all through the vacations, she mentioned.

“When you understand what your true state of affairs is, you could be a lot extra life like in relation to what you resolve to do for the upcoming vacation season,” Ho informed CTVNews.ca. 

Ultimately, the objective is to spend lower than what you’ve saved up, mentioned Émile Khayat, a senior regional supervisor with TD Wealth Financial Planning.

Another helpful technique could be to take a look at how a lot cash was spent over the vacation season final yr, Ho mentioned. From there, you may resolve whether or not those self same gadgets or occasions nonetheless make the listing, or if there are alternatives to chop again on spending.

“There’s a lot of homework involved in this but when people are in tight money situations, you have no choice,” Ho mentioned.

GET CREATIVE WITH YOUR GIFTS

Economic challenges can current Canadians with a chance to give you distinctive reward concepts – ones that embrace extra than simply tangible gadgets, mentioned Evelyn Jacks. The Winnipeg-based monetary professional is the president of Knowledge Bureau, a monetary schooling institute.

“Think about this holiday season as an old-fashioned one,” she informed CTVNews.ca. “Sometimes, the best gift that we can give to one another is the gift of time.”

Instead of spending cash on costly merchandise, Canadians can put money into shared experiences that will not value practically as a lot, Khayat mentioned, equivalent to going to a restaurant or spending a day collectively. Homemade presents can be a less expensive various to purchasing presents for family members on the retailer, he mentioned.

Another means to save cash whereas gift-giving includes organizing a present change between a big group of individuals, the place every individual purchases a present for another person, Khayat mentioned.

“It’s definitely cheaper than buying a gift for every person,” he informed CTVNews.ca.

One final choice, notably for folks, includes setting cash apart for his or her youngsters in a tax-free financial savings account or a registered schooling financial savings plan as a gift. This additionally acts as an funding for the longer term, Jacks mentioned.

“This brings an education culture to the family, where the kids know that every year, Mom and Dad are saving for me,” Jacks mentioned. “What a wonderful gift that is.”

START PLANNING EARLY

By growing a spending plan forward of the vacation season, Canadians can begin setting apart cash upfront to pay for presents, meals and different bills all through the vacations, Arbour mentioned.

Deciding on which presents to get and for whom forward of time may also allow you to benefit from bargains all year long, whether or not in-store or on-line, Khayat mentioned. Additionally, by procuring upfront, you may keep away from operating into conditions the place gadgets are out of inventory as a result of excessive demand over the vacations.

When it involves planning for the 2023 vacation season, Ho mentioned she recommends beginning as early as this January.

“Lay out the costs and average it out over 11 months to see how much you would need to save to make sure that happens next December,” she mentioned.

Taking a strategic strategy to spending may also help Canadians keep away from stressing about their funds, notably when bank card payments arrive in January, mentioned Jacks.

HUNT FOR DEALS

According to Weintraub, one tactic Canadians are more likely to implement this vacation season includes buying presents from manufacturers with cheaper costs.

“Instead of buying a certain brand at a certain price point, I’m still going to buy you the same thing but I’m going to buy from a cheaper brand at a lower price point,” Weintraub mentioned. “The choices we make will likely be towards value for now.”

The identical goes for grocery retailer purchases, he mentioned, notably for many who count on to host over the vacation season. It could be sensible to buy round and purchase gadgets on the lowest value attainable, mentioned Weintraub.

“Buying more store brand or private label [food products] is another way to save 10, 15 or 20 per cent right off the bat,” Weintraub mentioned. “Canadians always love deals and bargains – there’s going to be that much more love over the next six to 12 months.”

Signing up for e mail alerts from shops you usually store at is one other option to keep on high of the newest offers, Khayat mentioned. He additionally recommends making the most of loyalty packages. Points amassed from procuring at completely different retailers or by utilizing completely different bank cards may be redeemed for reductions, reward playing cards and extra, Khayat mentioned.

“There’s always ways to get that cash value from these points and use them towards something else,” he mentioned.

AVOID USING CREDIT CARDS

Another option to restrict spending over the vacation season includes making funds in money relatively than utilizing credit score, Arbour mentioned. Doing so may also help forestall you from overspending, one thing that’s simpler to do when tapping a bit of plastic versus paying with a finite amount of money in hand, she mentioned.

“The pain point of separating from our cash is real,” she mentioned. “It can feel a little less concrete when we’re using credit.”

Jacks additionally advises Canadians to assume twice earlier than paying with a bank card through the vacation season. While utilizing credit score might permit them to pay for bills at a later date, they need to nonetheless think about whether or not they can afford these purchases now, she mentioned.

“If you can’t afford to pay for these expenditures today … chances are you won’t be able to afford it when the credit card [bill] comes through,” Jacks mentioned. “Then, what you’re going to be facing is a high interest charge on top of your expenditure.”

SHARE HOSTING RESPONSIBILITIES

For those that will likely be internet hosting company over the vacations, one option to curb spending could also be to prepare potlucks, the place every visitor brings a unique dish. This may also help elevate among the burden of constructing meals off of the host, Jacks mentioned.

For households who could also be trying to order in, splitting the associated fee between company is a money-saving choice as effectively, Ho mentioned.

This yr may additionally be an excellent alternative to rethink the sorts of get-togethers you’re having with family and friends members all through the vacation season. Perhaps organizing a brunch or cocktail get together as a substitute of a proper, sit-down dinner is less complicated on the pockets, Arbour mentioned. It’s additionally value contemplating whether or not it’s essential to attend these sorts of occasions within the first place, Ho mentioned.

“Whip out the December calendar and see what you actually want to commit to,” she mentioned. “You don’t have to go to everything.”

OPENLY DISCUSS EXPECTATIONS

With many Canadians feeling the pinch of excessive inflation and rising rates of interest, it might be helpful to have a dialog with family and friends about what sorts of vacation plans are inexpensive, Ho mentioned.

This can contain speaking to kin about having fewer get-togethers, or talking with pals about whether or not it’s truly needed to purchase presents for his or her youngsters.

“It just takes one person to break the ice … and go, ‘Hey, no pressure, everyone’s in different situations, let’s talk about this,” she mentioned. “Because the last thing we want is for someone to get themselves into a bad [financial] situation.”