Holiday season budgeting

December 10, 2025

As we approach the end of the year, many people start to anticipate the holiday season. This can be a joyous time of the year, but it can also be filled with additional expenses. Creating a plan and budget can help with navigating the through holiday season.

Creating a holiday plan may seem overwhelming, but when developed with careful thought it can help keep you organized and on budget. Start by deciding what is most important to you before you get caught up in the frenzy of shopping, decorating and entertaining. Make a list of everything you would like to purchase such as gifts, decorations and specialty food items and then put a price tag to each. Next calculate how much income you have over the holiday period, subtracting your regular expenses including housing costs, utilities and groceries. Once the essentials are taken care of any money that is left over, plus money you may have saved specifically for the holidays, can be used for spending. If there is a shortfall then revisit your list and adjust as required. While it may be tempting to deviate from your budget, it is important to stay on target.

Strategies for holiday budgeting

A plan and budget will help with staying on track with spending while keeping the holidays festive. Some ideas to consider when creating a holiday season budget include:

Opening a holiday account

Start setting aside a designated amount of money each week or pay period leading up to the holiday season. This will help you meet your holiday spending goals. Saving a little at a time can alleviate the burden of finding additional money within your regular budget.

Shopping smart

Find the best deals by taking time to research sales, comparison shop for the lowest prices and take advantage of online promotions. Planning ahead can help save money and stretch your budget.

Cashing in loyalty points

Many people save credit card points and store loyalty points throughout the year. The holiday season may be the ideal time to redeem the points for discounts, trade them in for gift cards or pre-selected items or convert the points into monetary value.

Paying with cash

Before hitting the stores to complete your holiday shopping, calculate how much you will need to spend and bring that amount in cash. Although using a credit card can be convenient, shopping with cash can help you stay on budget and avoid impulse purchases.

Hosting a potluck

Ask guests to contribute to the festive meal by bringing a dish to share. This will not only cut down on food costs but will allow more time for hosts to mingle with their guests.

Borrowing vs buying

Check if you can borrow decorations, entertainment and dining equipment such as folding tables/chairs, dishes and serving platters from friends or family instead of buying new ones.

Using budgeting tools

Leverage online budgeting tools and digital applications to help track spending while on the go.

Avoiding potential pitfalls

It is easy to get swept up in the excitement of the holiday season and this may lead to spending more than intended. Some common pitfalls to try to avoid are:

No budget and plan

Not having a clear plan for the holiday, including a detailed budget, may lead to being unorganized and result in overspending.

Impulse purchases

Many people begin shopping without a shopping list. The list should include all gifts you plan to buy for family and friends, decorations you would like to have for your home and groceries you may need to buy for special meals and celebrations. Shopping without an itemized list can lead to impulse purchases and overspending.

Last-minute shopping

Buying gifts or other items at the last minute can result in overspending as there may be limited options available in stores or sales have ended leaving items available at regular prices only.

Over-reliance on credit

Try to avoid depending on credit cards to make purchases, especially if you do not have a clear strategy for repayment. This can lead to increased debt balances, which may be carried forward into the new year. ‘Buy now, pay later’ promotions may also lead to overspending.

Not tracking spending

If you do not record all your spending in real-time, it can be difficult to keep on top of your holiday budget. Keeping track of what has been spent and what still needs to be purchased will help you remain organized and help reduce the chance of overspending.

Hidden or additional costs

Not all gift spending might be related to the prices of items. For example, extra costs can include shipping or handling charges if purchasing items online. Traveling to visit family and friends may include additional costs for gas, meals on the go and hotel stays. These types of additional costs can add up within the budget.

Strategies for gift giving

Gift giving is often a cherished part of the holiday season. It can be easy to get caught up in the excitement of shopping and be tempted to purchase additional unplanned items and spending more than budgeted. Planning carefully in advance can help with staying on track and enjoying the season. Some strategies to help with planning gift giving include:

Making a gift list

Make a list of everyone you wish to buy a gift for and put a price limit on the amount to be spent per person. As the season moves along, you may feel tempted to add more names to your list, however adding more people to buy for can create a strain on your budget.

Shop early

Plan to shop early to take advantage of off-season sales and to spread out your spending.

Consider a gift exchange

In place of buying individual gifts for each person, suggest a ‘Secret Santa’, a ‘Favorite Book Exchange’ or another creative approach to holiday giving. This can help to reduce the number of people you need to buy for on your list.

Do-it-yourself gifts

Tap into your inner creativity by making a handmade gift. This is often less expensive and can be more personal than a store-bought gift.

Gift of time

Giving someone the gift of your time can be priceless. Some ideas could include helping a friend or family member with a chore around their home, enjoying a shared activity such as cooking a meal together or planning for a night in to watch a favorite movie and enjoy some homemade popcorn. Whatever you choose, giving of your time is about creating memories through shared experiences.

Send e-cards

Many people enjoy sending holiday greetings to friends and family. Instead of buying holiday cards and postage stamps, consider sending e-cards to cut back on costs.

Carefully thinking through and developing a holiday season plan and budget is a great way to help reduce the financial stress of the holidays and focus on celebrating the warmth and joy of the season. If holiday spending exceeds the budget, it is important to create a plan to recover. This may mean modifying monthly spending for a couple of months to repay holiday-related debt or rebuild savings. The holidays traditionally span a few days of the year so it is important to avoid needing to recover from the financial stress for months or even longer afterwards. Wishing you and your loved ones Happy Holidays!

FirstOntario Credit Union in partnership with Aviso Wealth has an experienced team of advisors specializing in various areas of wealth management including retirement planning, investment management, estate and succession planning, individual financial risk management and more. These professionals are here to help you plan for the future and reach your financial goals. Visit FirstOntario.com/Investments or call 1-800-616-8878 ext. 1700 to connect with a FirstOntario advisor and start growing your wealth today – your way.

Mutual funds and other securities are offered through Aviso Wealth, a division of Aviso Financial Inc. The information contained in this report was obtained from sources believed to be reliable; however, we cannot guarantee that it is accurate or complete. This should be considered as a general source of information and should not be considered personal investment advice or a solicitation to buy or sell any mutual funds. The views expressed are those of the writer and not necessarily those of Aviso Wealth.