Remember that year that you bought a loved one a gift so great they cried out in delight when they opened it? You want to do that again this year for everyone on your list. But you want to do it on a budget so that you don't cry out in alarm when you get your January credit card bill.


“During the year, we all worked very hard to save and build a budget. It is very important that we don't lose track and impulse shop around the holidays.”

Ava Zarrion, Scotiabank Investment Specialist and Financial Planner

That's particularly important this year, adds Zarrion, no matter how COVID-19 affected you financially. 

Want to get on top of your investment and savings planning?

So, how do you buy everyone the perfect gift without overspending? That's a tall order, but here are some tips:

First, set a budget

Figuring out how much you should spend this year on holiday gifts is the first step. Zarrion suggests that ideally you should have looked at your budget earlier in the year and set money aside each month in pre-authorized contributions.

“One thing many people do is open a separate no-fee savings account and transfer money into it every month,” she says. “It can be $10 or $20 a month – whatever your budget is.”

But what if you didn't do that? Zarrion says that you should then look at how much you have in your budget for the rest of the year after fixed expenses like your mortgage, car loans, insurance, cell phone bills, retirement savings contributions, utilities and any other expenses you have no control over.

What you have left is for your discretionary spending – which includes things like entertainment, clothes and other necessities. Once you've set aside money for those things, the rest can go towards holiday spending.

Learn more about how to budget for your household all year long

Find creative ways to stay on budget

Zarrion knows the temptation to go off budget when shopping – she says she’s been known to buy things for herself while combing the mall for gifts when she knows she shouldn't. So, how do you stay within your spending limit? One strategy is to reduce how much you're spending on each gift.

“If cash is limited, one good way to save is to buy gifts with others,” she says. “For example, siblings can chip in to buy a bigger gift for their parents. You can do this for teachers too with other parents in the classroom. That way you can buy them a bigger gift without spending too much.”

One creative option Zarrion believes most people don't think about is using their rewards credit cards. “Since you're likely not using them this year for travel, consider cashing in your points for gift cards.” she says.

Zarrion also suggests giving acts of service instead of buying things. “You could give a friend a coupon for babysitting for the weekend,” she suggests. “Instead of buying something, gift your loved ones your time.”

Are you creative? If so, Zarrion recommends making DIY holiday gifts. “You can always make your own holiday cards,” she says. “I also really like giving baked goods. You can make cupcakes or candies or cookies and then wrap them nicely and give it as a gift.”

What to do if you go over budget

If you find yourself overspending, you can always try to adjust your overall budget to make up the difference.


“If I'm over my budget,” says Zarrion, “I go over other discretionary expenses and decide which one I want to cut. For example, if I went a hundred dollar over in my gift-giving budget, then I can decide not to order in the next month to make up for it. Often there's some wiggle room in your budget.”

But what if you don't have wiggle room and you rack up holiday gift buying debt?


“It can be disappointing to go over budget, because it can get you off course from reaching your financial goals,” she says. “If this happens, try to pay off your bills as soon as possible to avoid paying interest on your credit cards. That way you can get back to your regular budget and working towards your goals, whether you are thinking of buying a home, funding your child’s education or retirement planning.”

Stay strong

"Going overboard with shopping during the holidays can be tempting when your favourite stores are offering a lot of great deals. That might help you save money on things you were going to buy anyways, but it could tempt you to spend more than you want to," says Zarrion.

Stores know how to get us to part with our money. They place bargain bins near the front by the registers. They offer free shipping – but only if you spend so much money, which tempts you to spend more. They offer “Buy one, get one free” deals – and we all want to get one free,” she says. “But you need to stay focused on your list and your budget and ignore all that as best as you can.”

If you manage to do so, she says, you'll be able to better enjoy the holidays because you won't be worrying about paying it all off come January.

Need help with your holiday budget? A Scotiabank advisor is someone you can talk to about a financial plan that will work for you