There’s no way around it: the most wonderful time of year may also be the most expensive—especially this holiday season. According to research from Dentsu, 75% of consumers are worried about inflation driving up the cost of holiday items. From the turkey on the table to the decorations on the tree, many familiar traditions will cost more this year. The good news is that with planning and a few practical strategies, you can stretch your budget and enjoy the season without overspending.
Below are clear, practical tips to help you cover holiday costs—from gifts and decorations to travel—and to begin the new year on sound financial footing.
1. Begin with a plan
Start by listing all anticipated holiday expenses. Use a simple checklist or, better yet, a spreadsheet to capture every cost: gifts, gift wrap, cards, special meals, hosting costs, seasonal attire, and travel. Include small but recurring items like tips for service providers and hostess gifts. Identify everyone you plan to buy for, from immediate family to friends, coworkers and service providers, and attach a tentative amount for each person.
Once you have a total, compare it to what you can realistically afford. Trim where needed—choose fewer but more meaningful gifts, scale back decor, or substitute handmade or baked items for store-bought presents. If you have last year’s list or receipts, use them to guide your estimates and make adjustments for price changes this year.
2. Track your spending
Keeping close track of purchases prevents small impulse buys from derailing your plan. Mobile banking apps can consolidate accounts and cards to show where your money goes. Budgeting apps categorize spending automatically, giving you a clear picture of gift purchases, travel outlays and entertaining costs in one place.
If you prefer a manual approach, update your spreadsheet in real time: enter receipts as you shop and maintain a running total. That way you’ll always know how much remains in each category and can reallocate funds—save on stocking stuffers and spend a bit more on a main gift, for example. Regular review also helps you spot deals and avoid last-minute overspending.
3. Take advantage of sales
With shoppers focusing more on discounts—86% say sales and promotions matter more this year, according to Dentsu—timing and research can deliver major savings. Retailers increasingly promote online deals and earlier seasonal discounts, so start watching prices and set alerts for items you want.
Subscribe to retailer newsletters and text alerts, check digital flyers and use browser price-tracking tools to monitor drops. Buy nonperishable items or gifts that won’t go out of style during early promotions. If an anticipated sale you’ve been waiting for doesn’t appear, consider comparable lower-cost alternatives or gift cards as a flexible option.
4. Be smart about travelling
Holiday travel is often one of the biggest budget pressures. With high seasonal demand and lingering travel enthusiasm, prices for flights and hotels can spike. Book travel and accommodation early to lock in lower rates and avoid last-minute premiums. Consider flexibility with travel dates, airports or modes of transport to find better fares.
Driving can be a cost-effective alternative for shorter trips—especially when factoring in the total cost of air travel for a family. If you fly, compare bundle deals and loyalty programs; if you drive, budget for fuel, tolls and parking. Whatever your plans, include incidental costs—meals, entertainment, souvenirs, tips and unexpected expenses—so your budget covers the full picture.
5. Use a credit card with benefits
When used responsibly, a credit card with rewards can reduce holiday outlays by earning points, cash back or travel benefits on everyday purchases. Redeem rewards for groceries, merchandise, travel or gift cards to offset seasonal spending. If you carry a balance, weigh the rewards against interest costs; the value of rewards disappears if you incur high finance charges.
To maximize benefit, use cards that align with your spending habits—groceries, gas, or online purchases—and redeem earned rewards strategically for holiday expenses or to plan next year’s budget. Monitor statement cycles and due dates to avoid late fees, and aim to pay off balances quickly.
Read more about spending:
- Back to basics: Finding balance in your budget
- New year, new spending habits
- Want to save money on gifts? Embrace holiday sales, and start early
- The best financial apps for Canadians
By planning intentionally, tracking expenses closely, taking advantage of sales, making smart travel choices and using rewards wisely, you can enjoy holiday traditions while keeping your finances under control. Small changes now—like baking gifts, starting your shopping early and prioritizing who really needs a present—add up to meaningful savings and a less stressful season.