According to PwC, Canadian consumers plan to spend an average of around $1,675 on gifts, travel, and entertainment this holiday season – emphasizing why having a simple plan can make the season feel lighter and more financially manageable.
This guide will help you create a realistic budget, manage expectations, and avoid holiday debt – all without sacrificing the fun.
What is a holiday spending plan (and why do you need one)?
A holiday spending plan outlines what you need, what you can afford, and how you’ll pay for it. It keeps you intentional and prevents the “holiday creep” that leads to credit card strain in January.
A good plan helps you:
- Avoid impulse purchases
- Prioritize what matters most
- Stay within your comfort zone
- Reduce January financial stress
If gifts are your biggest expense (for most people, they are), this is where planning ahead makes the biggest difference.
Download our free Gift Giving Budget Tracker to organize your gift list, set limits, and track spending with ease.
How to manage holiday spending – step-by-step
1. Assess what you actually need
Make a quick list of holiday essentials:
- Gifts
- Food and hosting
- Travel
- Décor
- Events
Then identify where you can simplify. Many families agree to focus on children, do a Secret Santa, or set a per-person gift limit.
2. Build a budget you can stick to
Assign a maximum amount to each category and review where you can trim costs.
Tools that help:
- Simple spreadsheet
- Phone budgeting app
- Cash envelopes
- Our Gift Giving Budget Tracker for detailed gift planning
3. Identify extra income (if needed)
If your budget feels tight, consider:
- Picking up a seasonal shift
- Selling unused items
- Freelance or craft-based side gigs
Even small boosts can help to provide breathing room.
4. Track your spending in real time
Overspending happens when you don’t know where the money went. A quick rule: subtract every holiday purchase from your category immediately. This is simple to do in our Gift Giving Budget Tracker.
Holiday spending red flags to watch for
Red flag 1: Relying too heavily on credit cards
Credit card interest quickly makes holiday purchases more expensive when your bill isn’t paid off in full at the end of each month.
Red flag 2: Emotional or guilt-based spending
Feeling obligated often leads to overspending.
Red flag 3: Last-minute shopping
This almost always leads to paying full price for items you can purchase in sales.
Red flag 4: Buy-now-pay-later temptations
These can stack up fast and lead to surprise bills in the new year.
Red flag 5: Unclear expectations with family
Not agreeing on limits causes overspending by default.
How holiday spending impacts your January finances
Overspending can lead to:
- High interest charges
- Lower credit scores (from high credit utilization)
- Delayed savings or debt repayment goals
- Increased financial stress
A realistic budget now protects your financial wellbeing in the new year. If your credit card balances feel unmanageable after the holidays, a consumer proposal may offer a more affordable way to reduce your debt by up to 80% and stop interest from growing.
Realistic holiday scenarios and simple fixes
Scenario 1: Large family gifting
15+ people to buy for.
Fix: Propose a Secret Santa or kid-only gifting.
Scenario 2: The last-minute shopper
Everything is usually bought at full price last minute each year.
Fix: Make a plan by early December and track each purchase.
Scenario 3: Hosting on a budget
Food and décor add up quickly.
Fix: Host potluck-style and reuse older décor.
Scenario 4: Travel stress
Holiday travel prices balloon.
Fix: Travel on off-peak days or use reward points.
Holiday budget templates you can use
Template: Message to set gift expectations
“Hi everyone! To help keep things manageable this year, can we set a spending limit or focus on gifts for the kids? Thanks for understanding!”
Template: Politely opting out of events
“Thanks for the invitation! I’m keeping a more mindful holiday budget this year, so I may sit this one out – but I’d love to catch up in January.”
Maximize your planning with our free Gift Giving Budget Tracker
Want an easier way to organize all your gift ideas and spending?
Our free Gift Giving Budget Tracker includes:
- A clear budgeting dashboard
- Space to list recipients and gift ideas
- A section to track purchase dates, costs, and retailers
- A total spending summary
- Tools to plan for birthdays, holidays, and year-round giving
Download your free Gift Giving Budget Tracker to stay organized and avoid overspending – during the holidays and all year long.
Holiday Spending FAQs
How much should I spend on the holidays?
Whatever fits comfortably in your budget – not a fixed dollar amount.
How do I avoid overspending on gifts?
Plan early, set limits, and track purchases using a tool like our Gift Giving Budget Tracker.
Is it better to pay with cash or a credit card?
Cash prevents overspending; credit works if you pay the full balance immediately.
What if I overspend this year?
Adjust January’s budget, pause non-essential purchases, and review your debt options if you’re struggling.
If the holidays have left you feeling financially overwhelmed, you don’t have to navigate it alone. Reach out to us anytime or book a no-obligation consultation to explore your options and speak with a Licensed Insolvency Trustee for free, confidential advice.
