Making your list and checking it twice. Avoiding common holiday mistakes

Don’t ignore your financial logic and allow your spending to run out of control! Regain control by avoiding those common holiday spending mistakes that we’ve encountered over the years.

I love the holidays! But let’s face it, the holidays are the one time of the year when we ignore our financial logic and let our spending run out of control. Holiday spending mistakes could be costly and set us back financially as we begin the new year. 

Here are some common holiday spending mistakes we’ve encountered over the years.

  1. Guilt shopping. So you peeked under the tree and realized that your significant other spent a whole lot more on your holiday gift? Guilt sets in. You throw away the trinket that that you had purchased and head to the most expensive aisle in the department store. We’ve all been a victim to it. Resist the urge to shop while you are in guilt mode. There are less expensive and memorable and meaningful gifts to consider before you slap that credit card on the counter.
  2. High-end gift accessories. Holiday cards can vary in price upwards of $15. Other gift accessories such as bows, ribbons, gift bags/boxes and wrapping can add up slowly and surely. Trim the extra cost of accessories by going paperless, such as using online holiday cards. Infuse creativity in your wrapping by using old music sheets, comic books or favourite magazines to wrap gifts.
  3. Paying too much. Manage your holiday spending by comparison shopping, using price-matching options and looking for holiday shopping deals. Take advantage of online, warehouse and bankruptcy sales. Last year’s trend items may end up saving you a few bucks.
  4. Obtaining more credit. Adding credit cards over the holidays has become a painless and fast process for consumers. Plus, some retailers are willing to throw in that extra incentive as their “gift to you,” which may sound like a good deal, but buyer beware! Interest rates on credit cards are typically very high, so proceed with caution. Additional credit means that much more debt in the end.
  5. Buying for everyone. Who doesn’t like to receive a gift or two during the holidays? But, you don’t need to buy gifts for everyone you know. Organize gift purchases with friends and family, so that all contribute to a larger gift rather than buying smaller gift purchases individually. Redeem reward points towards gifts or gift cards. Or, participate in a Kris Kringle gift exchange with set limits to control spending.

Embracing the holidays doesn’t mean that we have to trade off our financial senses. Reducing our holiday spending mistakes will leave us with more money in our pockets and the confidence that we received the best value for our hard-earned dough. Santa makes a list and checks it twice, so why can’t we?

Keep the conversation going

How much do you plan to spend on gifts during this holiday season?  Post a comment below.

Disclaimer

The views and opinions expressed in this article are those of the author and do not necessarily reflect that of CPA Canada.

About the Author

Wendy Castanha, CPA, CGA, BAccSc

Consultant, DuCa Management Consulting/Professor, Durham College