The best ways to avoid overspending this holiday season

With the holiday season in full swing, many of us will be giving gifts and attending parties, which could cause your bank account to take a hit.

Personal finance educator Kelley Keehn referred to it as “the happiest and the most expensive time of the year.”

Keehn said that people are facing the “scarcity mindset” due to the COVID-19 pandemic.

“It’s kind of like we’ve been put on this incredibly restrictive diet, we’ve been fasting, we’ve staying home all this time, and then you just want to explode and binge,” she said.

“That’s exactly what happens when you haven’t been able to spend for a long time.”

Keehn said many people want to make up for lost time because they couldn’t be with their loved ones last year, but it’s best to take a pause and make a plan.

“Bringing it back again to what we would do when it comes to our health or grocery shopping. We know we don’t go out on an empty tummy. We know we don’t go out without a plan,” she said.

“You know if you’ve got that list, you’re going to likely come back with those items when you hit the grocery store. It’s exactly the same thing when it comes to holiday shopping.”

Keehn said it’s easy to derail and overspend without a plan.

She added there’s nothing wrong with indulging a little, and that the economy needs us to be spending money, but it’s important to take a step back.

“What you want to do is write down everyone you’re going to spend on," Keehn said.

“It’s also those little items that derail our spending. Maybe it’s the extra holiday parties you’re invited to or the people coming over, now you’ve got the food, the alcohol, whatever you’re going to do to entertain. You really want to keep all of that in mind and really do your best to stick to that budget.”

Keehn said it’s a good idea to pre-shop online so you don’t get tired in the stores and overbuy, write down a list of the people you’re buying gifts for, and attribute a dollar amount to the gifts and stick to it.

She noted people should shop at stores that have a return policy, not just an exchange.

“So, if you do go a little overboard and you get back and you feel a little upset about it, you can return those gifts later.”

Keehn also suggested asking people what they want for gifts.

“My mom, I want to buy her the world. I didn’t get to see her last Christmas and she was a single mom, she deserves the world,” she said.

“But when I ask her what she really wants, she just wants some time with me. So, I’m going to cook her a great dinner, and put my phone away, maybe even leave it at home, and be present with her. Sometimes that gift of time is more rewarding than anything we can buy for our loved ones.”

- With files from CTV’s Nicole Dube.