How to set a holiday budget in Canada

The simplest way to set a holiday budget in Canada is to decide one total spending limit before you shop, write it down, and track every purchase against it. The federal government’s free online budget planner can help you work out a realistic limit, and a shopping list will help you hold to it.

The timing matters. Black Friday falls on Nov. 27 this year and Cyber Monday on Nov. 30, which means the biggest sales arrive before most people have decided what they can afford. A 2023 survey by CPA Canada, conducted by Ipsos, found that Canadians planned to spend an average of $645 on holiday gifts that year, up from $589 the year before. The same survey found that 29 per cent of respondents said they could take on debt to pay for holiday purchases, up from 22 per cent a year earlier. Those figures are from 2023, but they show how quickly seasonal spending can outrun a household’s plans. Only 56 per cent of those surveyed said they usually set a holiday budget at all. Here is how to be among them.

1. Set one total limit. Start with what you can pay for without relying on credit. Consumer Protection BC points Canadians to the Financial Consumer Agency of Canada’s online budget planner, which suggests an approximate spending limit, lets you save your budget to finish later and offers tips along the way. Use the number it gives you as your ceiling, not a starting point.
2. List everyone and everything. Write down each person you plan to buy for, plus other holiday costs such as food, travel and wrapping. The CPA Canada survey found that 30 per cent of people planning to travel, and who had a sense of their costs, expected travel expenses to rise. Counting those costs first prevents gifts from eating a budget that other expenses already need.
3. Shop with a list. Consumer Protection BC advises writing out what you need to buy for each person. A list keeps you to the necessary items and helps you avoid impulse purchases, which are easy to make during a sale.
4. Consider making instead of buying. Consumer Protection BC suggests baking a gift, such as a batch of homemade treats for a coworker or a teacher. If you plan ahead, you can buy some ingredients early when they are on sale. Butter freezes well, and flour, vanilla and sugar keep until you are ready to use them.
5. Cut back on the number of gifts, not the thought. When respondents to the CPA Canada survey were asked what they would do if they faced financial difficulty, 46 per cent said they would cut back on the number of gifts and 22 per cent would consider non-traditional gifts. Fewer, more thoughtful gifts is an option that costs nothing to adopt.
6. Look for discounts and use points. In the same survey, 48 per cent said they would opt for discounted items and 27 per cent would use loyalty points. Our guide to Black Friday and Cyber Monday dates in Canada can help you plan when to buy, and our gift ideas for someone who has everything may help you narrow your list.
7. Reuse wrapping. Consumer Protection BC notes that reusing gift bags or wrapping paper saves money and is better for the environment. It also suggests using the Sunday comics or colourful magazine pages as wrapping.
8. Track as you go. Keep a running total of what you have spent against your limit. Of the people surveyed, over one in five expected to overspend their holiday budget, and a running total is the easiest way to see it coming before the statements arrive in January.

A holiday budget does not need to be complicated. Pick a limit, write a list, and check your total each time you buy. If you do need to borrow, think carefully first: the CPA Canada survey found that 27 per cent of people facing a shortfall would use credit cards to cover it.

Sources: Consumer Protection BC, “Tips for saving money this holiday season” (Nov. 2011); CPA Canada, “New CPA Study Reveals Canadians’ Holiday Spending Soars Despite Economic Snowstorms” (Nov. 7, 2023), Ipsos survey of 2,000 Canadians, Sept. 14 to 18, 2023; Financial Consumer Agency of Canada budget planner.