Personal Finance » Spending

Control your Christmas spending

“Gifts are thoughtful but not always necessary.” – POB Bismark

I’m not entirely sure where this year has gone. It seems as though only last week it was September and now suddenly the malls, cities, and houses are all decked out in their holiday finest and people are busy making their lists and checking them twice. It’s certainly a magical time of year and some of the magic lies in the ability of stores to whisk far more of our hard-earned money out of our pockets than we originally intended. It’s the season of Christmas spending.

I’m pretty confident that most people reading this will have seen or experienced this particular brand of magic at some time in their lives. It’s the reason that we find ourselves coming home from a shopping excursion with far more in our hands than we planned and far less in our wallets than we’re happy with. It’s a phenomenon that’s especially evident if you happen to find yourself in a mall on Christmas Eve when getting swept up in a whirl of last-minute panic combined with beautifully highlighted options inspires us to take a temporary leave of our senses when it comes to sticking to the gift budget. Retailers and advertisers know exactly what to do in order to increase our Christmas spending. They carefully lay a trail of tempting commercials, bargain pricing and time-sensitive offers, all designed to lure customers, boost sales and help us spend more. As savvy money managers though, we have a responsibility to ourselves to build our immunity to this Christmas spending and to make sure our hard-earned money keeps working for us rather than our favorite retailer or financial institution.

Make a list and check it twice

It sounds simple but there is plenty of scientific and anecdotal evidence to suggest that people who make lists (and stick to them) spend less than those who don’t. It doesn’t matter whether it’s for groceries or gifts; writing a list forces you to consider the whole picture and challenges you to really look at your list and then decide if there’s any way to make it smaller. Just because you’ve bought gifts for certain people in the past doesn’t automatically entitle them to a place on your list this year. In my family, for example, my brother, sister and I still buy gifts for our parents but we no longer buy gifts for each other. Instead, we make a point to go out for dinner together at some point over Christmas. Not only does this cost less but it also allows us to spend some time just hanging out which rarely happens at any other time of year. I buy gifts for my niece and nephew because they’re still young but rather than spending a huge amount, I buy them just one or two smaller gifts and then contribute the money I would have spent on a larger gift to their savings accounts. I figure that 10-15 years down the road, when they’re heading off to university or wanting to buy a house, they’ll thank me more for the investment dollars than for the super-sparkly must-have toy that has long since been discarded and forgotten about!

Set a gift budget… and then cut it in half

If the commercials on TV and in the media are to be believed, then showing the appropriate amount of appreciation for the significant people in our lives carries a price tag of hundreds (possibly thousands) of dollars. Jewelry, electronics, power tools, an array of all-singing, all-dancing gadgets… there are a myriad of ways to show the people in your life just how much you love them (and an abundance of ways to finance that purchase if you choose to). I’ve commented before on how materialistic our society has become and this is never more evident than during the run-up to the holiday season. So many of the people I talk to feel an enormous amount of pressure to make this “season of giving” all about the gifts that can be wrapped in shiny paper.

Christmas spending or making memories

In truth, the real spirit of the season is found in sharing the gifts of time and making memories with the people who matter most in our world. We buy into the myth that, without a beautifully decorated home, a fridge that is overflowing with food and a big pile of gifts under a stunning tree, we are somehow depriving the people we love of the true festive experience. In reality, when we look back on our own childhood memories of Christmases past, there’s a good chance that the most treasured memories involve the experiences of the season rather than the gift unwrapping. I know that I can only remember a very small percentage of the gifts that I received as a child (and some of them I remember only because they were so awful I can’t forget them!) but I do have a ton of memories involving hanging out with my family and friends, staying up late and enjoying the fact that my dad had two or three days off work.

This year, why not focus on finding ways to make the season special for those you love without committing a huge amount of money and Christmas spending. This may not make your favorite retailers terribly happy but you may be surprised at how it increases your enjoyment of the holiday season.

As always, I’d love to hear your thoughts, stories, and suggestions so feel free to comment!


  1. Frank

    Have you set up an RESP for your niece and nephew? Or is it just a high interest savings account?

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