Smart Advice Budgeting

Tips for holiday gifting on a smaller budget

Manage spending — and expectations — to make the most of this holiday season.

Dec. 05, 2022 4-minute read

The snow is falling and prices are rising. With an uptick in the cost of essentials like groceries and gas, you might be thinking of celebrating the holidays on a smaller budget this year. If so, you’re not alone. According to a recent retail trend report, Canadians plans to spend 17 percent less on average this holiday season than last year.¹

So how do you trim down your list without cutting back on the connections and fun the festivities can bring? Here are some tips to help manage both your spending and the expectations of family and friends if you scale back your spending this season.

Set clear expectations

Let your loved ones know if you’re planning to go without gift-giving, or purchase smaller gifts to stay within budget, and ask that they do the same for you.

Odds are you're not the only one feeling the pinch these days. Some friends and family might welcome the opportunity to cut back or consider alternatives to gift giving. For example, if it's a family tradition to exchange gifts, suggest a spending limit, draw names or try a “kids only" gift policy.

Make a list, check it twice

Avoid getting caught up in the spirit of giving and stick to a short and sweet list of people you have a relationship with or want to show appreciation for. Set aside the guilt and move away from the social obligation to give. Sticking to a list, much like grocery shopping, helps you keep your finances in check and avoid last-minute impulse buys.

Put a number on it

If you do decide to exchange some gifts this year, assign a spending limit for each person. Don't forget to include expenses like wrapping paper and shipping costs — planning ahead will help you avoid extra rush charges — as part of your overall budget.

If you shop online, make a list of everything you’ve ordered so you don’t go overboard. It sounds simple, but with the busyness of the holiday season, it can be easy to click “buy” and forget about your purchases until they arrive at your doorstep.

Paying later? Plan now

Many online retailers offer payment plans. When you’re paying a fraction of the sticker price up front, it can put that present you’ve been eyeing in reach in the short-term. Before you break up your purchase into instalments, make sure you can continue to make the payments.

To get a big picture view of your monthly spending and savings, so you can see how the additional payments fit in with your other expenses, you can use a budget calculator.

Change up the holiday traditions

There's nothing wrong with doing things a little differently this year. Think about gift-giving alternatives, like starting a new holiday tradition of doing something together as a family. If you're crafty, go the DIY route or give gifts of service, like a homecooked meal.

Give the gift of gratitude

Over the holidays, you might receive an unexpected gift from someone. Maybe you meant to tell a friend you weren’t planning to exchange gifts this year, but life got busy and you forgot to send that text. It can be tempting to run to the store to match their gift with something of the same size and value. If it’s not in your holiday budget, though, that may not be possible.

Accept the gift graciously and let them know how much it means to you. Following up with a phone call or a handwritten thank you card is a great way to show gratitude.

It really is the thought that counts

Sometimes simple is best, and a holiday card with a personalized message can be incredibly meaningful. If you're concerned about your holiday budget, make this season one in which you put less focus on things and more on time with each other. That’s what memories are made of.

¹ Spending less, connecting more: 2022 holiday retail outlook (Deloitte) (PDF, 3.4 MB) Opens in a new window.

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Tips for holiday gifting on a smaller budget

Set clear expectations

Make a list, check it twice

Put a number on it

Paying later? Plan now

Change up the holiday traditions

Give the gift of gratitude

It really is the thought that counts

Get help creating the life you want

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