Budget for the Holidays
ask an expert: holiday spendingcanada
(Nov.19.10)
I’m sick of being stuck with a huge credit card bill in January. What can I do to save money before the holidays?
Sylvia C. emailed us at expert@sweetspot.ca, and RBC's Maria Contreras answered:
With the holidays just a few weeks away, here are some simple things you can do to prepare for — and help alleviate — your spending stress.
First, establish a holiday budget. Review your monthly budget and determine how much you can comfortably afford to spend.
Figure out how much you think you are going to spend on the holidays. This should include your gift list as well as items like a new outfit and haircut for the company party or dinners out with friends to celebrate.
Maybe it’s not as much as you had originally thought it might be or maybe it’s worse then you thought it would be, either way, you now have an idea of your potential spending and you can plan for it.
Start putting money aside now to help alleviate the financial stress of the holidays. Look for ways to save money like cutting out movies and bringing your own lunch for the remainder of the year.
Also revisit your list. Determine what is a need-to-have item versus a nice-to-have item. Are there other ways to reduce costs?
You could consider:
- Having a gift exchange where family members pick a name and buy a gift for only one person instead of buying for everyone
- Borrowing an outfit from a friend instead of buying a new one
- Asking friends if they would be interested in having a potluck to celebrate the holidays instead of going out to dinner
Remember, you are likely not the only person who finds the holidays hard on your budget so don’t be afraid to bring up cost-saving suggestions with your friends and family.
If you plan on using credit and carrying a balance, make sure that you use the credit facility with the lowest interest rate. And, when paying it back always try to pay more than the minimum payment amount to cut down on interest charges.
To get a head start on next year’s holiday spending, open a dedicated savings account today. By setting aside just $25 a week can you could save $1300 in one year – enough to help you manage next year’s spending.
Maria Contreras is currently a Product Manager Savings Accounts at RBC Royal Bank. Maria has over 20 years with RBC and has held various roles in Personal Financial Services including 6 years as a Financial Planner. A love of designer handbags, passed on to her teenage daughter, has helped Maria gain experience with making savings goals and achieving them in style.
Thought that was sweet? You'll enjoy: