Someone using a calculator. CREDIT: ANNA OSTANINA
The pandemic has affected people in different ways. The rising cost of living doesn't help. When it comes to saving during the holiday season, that takes a plan.

As the holidays inch closer, many people have decided to cut back on their holiday budgets. This could mean trying to spend no money at all, or simply halving the budget. Regardless of how some have chosen to do it, it makes you wonder what’s going on to cause this?

“With short-term interest rates increasing dramatically over the past year to combat inflationary pressures, borrowing costs are higher for many people which leaves less money for discretionary spending,” said Brad Bishop, a professor and coordinator in financial planning and personal finance programs at Fanshawe.

The pandemic has affected people in different ways. The rising cost of living doesn’t help. When it comes to saving during the holiday season, that takes a plan.

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“It comes down to budgeting and having the discipline to stick to a spending plan. Of course, there are always deals to be had if one can invest the time in researching options.”

So what about sales? Black Friday is a very popular day across North America typically. But Bishop said it may not be as popular as it once was. So many businesses start their sales earlier leading up to Black Friday, so more people decide to shop and beat the crowd.

“A word of caution… A wise man once told me that, ‘a deal is only a deal if you need a deal.’”

If money is a struggle, be strict with yourself and pick up what is needed, rather than getting a deal just for the sake of getting a deal.

All in all, regardless of how you’re choosing to spend your money this holiday season, it’s a good idea to have a safety net. Times are tough and, who knows where the economy will go in the future? Never mind any unforeseen circumstances in your personal life.

“An emergency fund is very important and crucial to a financial plan,” Bishop said. “Many financial planners suggest having an emergency fund equal six to 12 months of expenditures that can be accessed quickly. This ensures a person or family can get by if an unfortunate event happens like a job loss or a death in the family.”

He said that it’s also wise for families to look for professional advice from financial advisors when it comes to protecting their income and lifestyle from these potential events.

“Financial management is all about prioritizing your spending between needs and wants. The first step in any financial plan after determining what the financial goals are, is to gather an understanding of where the income comes from and where it goes each month along with what is owed and what is owned.”

When you’re shopping this year, especially if you’re trying to save some money while doing so, there is no shame in thrifting gifts or making gifts. After all, it’s the thought that counts.