Strapped for cash? Here’s how to cut back on spending before Christmas

Canadian households have a lot of debt. In 2017, Canada hit a record level of debt – about 178 per cent, or $1.78 owed for every dollar spent. By June 2020, we were just barely

below that mark, thanks in no small part to the recession caused by the COVID-19 pandemic, and then household debt continued to rise throughout the year. By September, total consumer debt was up to $1.99 trillion – an increase of nearly 3 per cent compared to the same quarter in 2019.

Debt is not necessarily a bad thing: we use debt to finance homes, vehicles and other things that we need to live. But, when we have to spend more money paying down our debt, we have less of it for other things. You already know this if you’ve been thinking about what’s right around the corner: the holidays.

We all know the holidays can be expensive, but maybe you don’t know exactly how expensive: the average Canadian spent almost $1,600 over the 2019 holiday season. Yet more than half of Canadians have no emergency funds. It’s no wonder so many people report extra financial stress at the end of the year.

Unless you’re making a deliberate effort to save for the holidays, it can be overwhelming. That’s why we’ve put this blog together to help you cut back on spending before Christmas. It’s a straightforward challenge: cut your discretionary spending for a month prior to the holidays. (You can do this any time, of course, but some additional cash will come in extra handy for Christmas.) As you know, there’s no silver bullet for financial stress. But, if you’re concerned about making it through the holidays, below could be one tool for helping you achieve some manageable financial goals and achieving peace of mind before the holidays. Here’s why it might be a good idea for you, and how you could make it work.



The obvious benefit to a month of no discretionary spending is that you save money. But “saving money” is a vague goal. First of all, it doesn’t give you anything to get excited about – a slightly larger savings account is never as compelling as a more-concrete goal, like paying off a credit card or being able to buy a certain gift for someone you love. That’s the first thing to define – what, exactly, do you want to use this money for?

This isn’t just for saving money, by the way. If you’ve got your holiday expenses taken care of, you can still benefit from a month of no discretionary spending. Your goal could be a personal expense you’ve been waiting to make, an extra lump sum into a savings account or – in the spirit of the holidays – a large donation to charity.



Once you’ve got a goal, get a general sense of how much it’ll cost. Then, look at your monthly discretionary spending, if you don’t already know it. You can do this delicately, if you choose to – see if there are any subscriptions you don’t use anymore, or if you could trim some of your budget lines by just a bit. That will help, but if you want to hit a big financial goal, and if you want to make the most out of this month, the key is to be ruthless.

Be ruthless by convincing yourself that a discretionary expense is actually a necessary expense. Dinners out? You can live without them. New clothes? Wear what you’ve got – no one other than you knows how old that jacket is. Prepare to pay for your normal expenses, but only those that are absolutely necessary, like your mortgage or rent, heating, electricity and so on. You might want to slightly increase your grocery budget, since you shouldn’t be spending money on restaurants or delivery – but try to keep it as low as possible.

Once you’ve figured out how much you can reasonably expect to save, see if it aligns with your goals. Will it allow you to buy those gifts or pay off that credit card? If not, you may have to change your goal. Be realistic but make it something worthwhile. Even if you don’t have much discretionary spending to save in the first place, you might find that the little you save actually goes a long way.



No one said it’d be easy – that’s why they call it a “challenge.” There are a few things you can do, however, to help you stick it out. Try keeping a journal about your expenses, writing down every purchase you make so you’re always aware of what you’ve got left. You can also use a budgeting app, such as Mint, which will automatically track and categorize your purchases. This alone might give you a clearer picture of your finances.

Another tip: imagine what you’ll do when you’re tempted to make a purchase you don’t need. Run through your routine for talking yourself out of it – your pep talk. If you can visualize it beforehand, it’ll make it easier in the moment. If you know your weaknesses – maybe online sales – figure out how to avoid them. (It could mean blocking your favourite retailer’s newsletters.)

Remember that there are ways to get the benefit of purchases and satisfy the impulse without actually buying anything. If you like going out for dinner or ordering delivery, try meal planning instead and try making your meals at home. If you’re tempted to buy new clothes, see if your friends are trying to get rid of some of theirs. Your support community is crucial in this: if you’re around friends and family who are supportive, it’ll make the month a lot easier. If you’re close to people who insist on spending a lot of money when you’re together, consider taking a rain check until the holidays are over.

Finally, consider picking up a new interest, ideally one that’s free. This will do two things: save you from spending money and save you from thinking about spending money.

Remember, this isn’t just about saving money for one month: it’s about changing your purchasing patterns and learning to make do with what you’ve already got. These are practices that will bring you lots of benefits – financial and otherwise – throughout the years. They say it takes 21 days to effectively break a habit, so one month could change you for the better. But even if it doesn’t lead to a new, more financially stable version of yourself, that’s fine, too. Hopefully you can enjoy the holidays as they’re meant to be enjoyed – without thinking about your debt.