7 steps to smarter holiday spending

You don’t have to be a Scrooge to take control of your spending.

Read: Do the holidays make people cheap?

Still, considering that in 2012, average household debt in Canada reached a staggering 163% of annual income—for every $1 we make, we spend $1.63—most of us can’t afford that $400 Louis Vuitton wallet for Aunt Cecile, or that Xbox 360 Kinect for little Joey, says Advocis.

“Many Canadians are living beyond their means, and the holidays can be a great source of financial stress for them,” says Greg Pollock, CFP, president and CEO of Advocis.

Read: Cdns splurge hundreds of dollars each month

So here are seven steps to smarter spending this holiday season:

• Set a budget. Allocate a dollar amount per person and stick to it.
• Start early. Leaving gift buying to the last minute can result in spending more than you’ve budgeted for, not to mention impulsive purchases.
• Try Secret Santas. Draw a name from a hat of one family member you are to buy for, and set a limit on how much each person is to spend.
• Use your points. Consider using your Air Miles or other loyalty points to buy presents.
• Don’t use credit cards. Use cash to ensure you don’t spend more than your budget allows, and to avoid carrying a monthly balance.
• Look for sales. Go online and find out when your favourite retailers will be holding sales.
• Consider the gift. Is it something the person actually needs, or is it just going to gather dust? Consider gifts that don’t come with a price tag but offer value, such as babysitting for a night, volunteering for a friend’s charity, or cooking a nice dinner for your family.

Read: Canadians budget holiday spending

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.