Avoid hol­i­day hang­over with a gift-buy­ing plan

If you want to change your over­spend­ing ways, start by look­ing at how you shopped last year


With the fes­tive sea­son fast ap­proach­ing, there’s no time like now to start plan­ning if you’re go­ing to make it to Jan. 1 with­out break­ing the bank.

Set­ting — and stick­ing to — a hol­i­day bud­get can be chal­leng­ing, so I de­cided to con­sult the experts: San­dra Hanna, fi­nan­cial guru and CEO of per­sonal-fi­nance web­site Smart­cook­ies.com; and Scott Han­nah, pres­i­dent and CEO of the Credit Coun­selling So­ci­ety (nomore­debts.org). They shared their tips on how to es­cape the hol­i­day hang­over this year. Look at the past: If you want to change your over­spend­ing ways, Han­nah rec­om­mends look­ing at your shop­ping habits dur­ing the hol­i­day sea­son last year. Re­flect­ing on the past can show you what you did right — and where you went off track.

“Hav­ing time to re­flect on last year al­lows peo­ple to think about what they would change this year,” he ex­plains.

“Peo­ple get into a trend of over­spend­ing at Christ­mas­time, work­ing the whole rest of the year try­ing to pay it off, and over­spend­ing again at Christ­mas­time. The only way to break the cy­cle is to make some changes.”

Go­ing to a con­cert? Don’t for­get about taxi fares, dry-clean­ing fees and pay­ing a babysit­ter. Be aware of all your spend­ing — not just the big-ticket items. Make a bud­get: When it comes to gift ex­changes, set­ting a limit is crit­i­cal to avoid spend­ing money you don’t have.

“A lot of stud­ies show that if there’s no bud­get or guide­line in place, you end up spend­ing more,” says Han­nah, adding that this can be dan­ger­ous if you are us­ing money you don’t have.

“If you use credit and re­pay debt over a pe­riod of time, you may find the hol­i­day sea­son ac­tu­ally costs you 50 per cent more.” Try the four-gift rule: When shop­ping for her fam­ily, Hanna uses the four-gift rule. The sim­ple premise is that only four gifts can be pur­chased for each per­son: some­thing they’re wish­ing for, some­thing they need, some­thing they can wear, and some­thing they can read.

“It’s re­ally easy to go over­board for kids and spouses, so the four-gift rule is great,” she says. “It makes it eas­ier to keep the spend­ing in check — and you can make your own cat­e­gories.”

Cre­ate new tra­di­tions: Ever find your­self ex­chang­ing gifts with work col­leagues or friends and wish­ing you weren’t? If this sounds fa­mil­iar, it might be time to make new tra­di­tions.

“We all know those times when we’ve been ex­chang­ing gifts with peo­ple and you think, ‘Do I need to ex­change gifts with my friends when we’re all broke?’ ” says Han­nah. “Ev­ery­one’s think­ing about it, but very few peo­ple want to talk about it.”

Be cre­ative and sug­gest a new, lower-cost way to cel­e­brate. In­stead of buy­ing gifts for ev­ery­one, try a Se­cret Santa. If you over­spend on fancy din­ners out, con­sider host­ing a potluck. Chances are ev­ery­one will thank you for it. Track your spend­ing: Have trou­ble keep­ing track of what you’ve paid out? Fas­ten a piece of pa­per around your credit card with your bud­get on it, and sub­tract each time you make a pur­chase. Or bring a cal­cu­la­tor. Or join the 21st cen­tury and use the cal­cu­la­tor or an app on your phone. What­ever method you choose, track­ing your spend­ing can save money in the long run by rais­ing aware­ness and re­mind­ing you when you’ve reached your limit.

Hanna rec­om­mends the free app Santa’s Bag, which helps you keep track of what each per­son on your list wants, what you’ve pur­chased and where you’re at with your bud­get. Make a list (and check it twice): Know­ing ex­actly who you’re shop- ping for, what you’re look­ing for and the max­i­mum amount you’re will­ing to spend is key to avoid­ing the hol­i­day hang­over. “Peo­ple of­ten roll their eyes at it, but mak­ing your list is one of the most im­por­tant things you can do — and the ear­lier, the bet­ter,” Hanna says.

Once her list is made, the fi­nan­cial guru uses re­tail­menot.ca, a web­site that col­lects deals from ma­jor re­tail­ers that can be used on­line or in­store.

“If you go to a web­site like that with­out a list, you’ll start buy­ing ev­ery­thing you didn’t in­tend to buy,” she says, chuck­ling. “But if you go in and say, ‘OK, this is what I need and this is what I’m look­ing for,’ you’ll be pre­pared — and get a good deal.” Cut costs now: Han­nah sug­gests cut­ting costs in your daily life now to off­set big­ger bills in De­cem­ber. Pack­ing a lunch for work in­stead of eat­ing out and lim­it­ing your latte in­take can save you sev­eral hun­dred dol­lars — money you can put to­ward hol­i­day costs. Avoid credit cards: If you have dif­fi­culty stick­ing to a bud­get, Han­nah ad­vises avoid­ing credit cards at all costs and us­ing cash in­stead.

“The temp­ta­tion is just too high to spend more than what your bud­get al­lows as op­posed to a cash bud­get,” he says.

And it’s never too early to think ahead: Next year, set aside10 per cent of your hol­i­day bud­get each month, and by the end of Oc­to­ber you’ll have your en­tire hol­i­day spend­ing bud­get in your sav­ings ac­count.


Blow­ing your hol­i­day bud­get can be stress­ful. Try to plan out all your hol­i­day spend­ing, not just the big-ticket items.


Make sure you have a list and a bud­get be­fore start­ing your shop­ping.

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