Six personal finance experts tell us how they take the financial stress out of their holidays

Ah, December: the malls are decked out in tinsel, your exposure to sunlight is sporadic at best, Mariah Carey is piping out of every single speaker no matter where you go, and everyone around you is spending… so much money.

Here at LowestRates.ca, we want to help you deal — and we’re using a two-pronged approach to do it. On Thursday, we launched our #12DaysOfMagic contest for our Toronto readers to help bring a little more fun to the holiday season.

If you’re out and about over the next 12 days, you might spot our trusty company mascot, The Glint, strolling through the city’s streets. Approach it to gather clues, and use those clues for the chance to win some sweet, sweet prizes!

If you’re not in Toronto, fear not: you haven’t been forgotten. Below, we’ve collected tips from our favourite financial experts on how to stop the financial stress of the holidays from taking away the magic of it all. Your holidays can still sparkle, especially with the right approach to celebrating — or even a good cash-back strategy. 

The following responses have been edited and condensed for clarity. 

Melissa Leong
Personal Finance Writer, On-air Personality, Keynote Speaker, and Bestselling Author 

In response to what Santa should bring him for Christmas, my toddler said, "No toys. I have enough toys." That is so me. I identify what is important to me during the season and I try to align my spending with those values. It can be awkward when someone gifts a gift to you and you have nothing in return. So I proactively send out an email to my friends and family requesting no presents, for myself or my son, and it sets a precedent. The holidays, for me, are about family. So I spend the bulk of my budget on food and hosting and I invite everyone over for a Leong-lovefest.

Anne Arbour
Financial Educator, Credit Counselling Society 

No matter who you are and what you celebrate, this is a time of year where everyone needs to be prepared to spend money — whether it’s gifts for family, friends or others or attending events like office parties (babysitters, taxis, outfits), everyone needs to be prepared with a list and a spending plan.

I personally keep a little “holiday notebook” where I have a list of people I want to purchase for, adding new friends and crossing off old teachers, etc. I keep track each year of monies spent — even for things like wrapping paper and cards — so I can refer to it each year and not get caught short. It’s not always to the penny, but it gives me a rough estimate of what I should expect for the coming year. I also make a note if I’ve picked up a box of cards on sale in January so I remember to go look for them before I go out and buy more!

Jessica Moorhouse
Money Expert, Financial Counsellor & Speaker 

Since my early 20s, I’ve pretty much managed my finances the same way during the holidays. I try to remind myself that time is worth more than gifts. It can be easy to feel the urge to spend (because everyone else is doing it!), but at the end of the day, the best gift you can give someone is your time. Luckily, that doesn't cost you anything.

Jordann Brown
Personal Finance Expert and Creator of My Alternate Life 

The tip that I want to share is actually one that I am implementing for the very first time this year, which is to use a cash-back credit card for your regular spending throughout the year, and then save that cash back to fund your Christmas budget.

I usually spend around $500 on Christmas buying presents for my family and that sort of thing, and this year I was able to get over $600 in cash back from spending on a credit card and reliably paying off the balance every month. That totally covered my Christmas budget, and I didn’t even have to think about saving or budgeting or anything like that — it was just handled from regular spending.

I do want to add that if you’re going to use this method, you have to make sure that you pay off your balance every single month, otherwise the cash back that you earn will be offset by monthly interest charges. That’s very, very important.

Desirae Odjick
Personal Finance Writer and Creator of Half Banked - Stress-Free Money Management for Millennials

At the start of the season, I write down who I’m going to gift for and how much I’m going to spend on each person. But in recent years I’ve become so much more cognisant of how fast the other celebrations can spiral out of control, like if I have a work Christmas party and I’m going to spend $100 on a new outfit. Those are things that I actually plan for. When I’m doing that list of gifts, I also do a list of events and parties and celebrations and map out costs for those, too.

If you’re reading this mid-December, and the parties are in full swing, and it’s too late to talk to family about how much you're going to spend, the two best things you can do are: have a plan to tackle any consumer debt you may have incurred this year come January, and start putting away $50 to $100 a month just to give yourself a buffer for next year. If you’re saving $50 a month, there’s $600 you’ll have ready and waiting to manage Christmas next year.

Scott Terrio
Manager, Consumer Insolvency at Hoyes Michalos & Associates 

From January through May is when we're the busiest. We all joke that January 21st is the biggest day of the year because that’s when people get their credit card statements after Christmas. Even people who are already in extreme circumstances tend to go nuts at Christmas, sort of like the last hoorah. What we do is forensic, like “How did you get here?” It’s usually a long story over multiple years but the last bang at Christmas obviously didn’t help and usually pushed people over the edge.

Some of my suggestions are: Buy, don’t shop. If it’s not on your list, don’t buy it. Use cash and debit whenever possible, if not entirely. It tends to hurt more. And track your actual Christmas spending — like, all of it — for next year. You need a Christmas under your belt in order to do better for next year.

Over the three weeks of Christmas and New Years, we do a bunch of things that are out of the normal. And because most people are used to living paycheck to paycheck, Christmas inevitably blows that up. Don’t spend money that’s not coming in. If you did that in April, you’d notice it. What’s the difference in December? There’s no reason to go wildly over budget just because it’s Christmas.