How to enjoy the holidays without breaking the bank

Here's how you can make the most of the holiday season without blowing your budget.
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Is your holiday spending going to land you on Santa's naughty list?

With the additional temptations that the holidays bring — parties, late-night drinks, dinners out, online sales — it's easy to lose sight of your spending habits. And if you don't watch out, January's credit card bill is bound to be a scary one. 

"People take the holiday parties, gift giving, Christmas markets and everything in between as an excuse to splurge because the holidays only happen once per year. YOLO!" said Jessica Moorhouse, a personal finance blogger based in Toronto. "As fun as the holiday season can be, it doesn't mean you get a free pass to spend your money freely without any consequences."

Moorehouse calls the holidays a "big test in peer pressure," meaning it's a challenge to avoid getting sucked into the keeping-up-with-the-Jones' mentality so closely aligned with holiday consumer culture. 

But is it possible to cut back on spending without turning into a Scrooge? 

We asked personal finance bloggers Moorehouse, Jordann Brown of My Alternate Life and Kyle Prevost of Young and Thrifty, for their tips on enjoying the holiday season without blowing your budget.

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Create a holiday budget

Don't just say, "I don't want to spend $800 over the holidays." Break that number down into specifics. Say, $400 on gifts for the family, $100 on a new festive outfit, $100 on food and drink for your holiday gathering and $200 for Boxing Day shopping.

Track your spending

Every time you purchase a gift, decoration or holiday-related item, make note of it on a spreadsheet. Then, log your spending against the amount you budgeted for the holidays. That way, if you're about to blow your budget, you'll know.

Embrace gift exchanges 

Save individual gift-giving for family and suggest doing a gift exchange with your friends. This will take pressure of your own budget and your friends' too. 

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Go cash-only 

If you don't trust yourself with credit cards, stick to a strictly cash diet and take out the amount you need in accordance with your budget. Just be sure to limit your visits to the ATM. 

Potlucks are your friend

If you're hosting a big Christmas get-together, make it a potluck. Grocery costs can add up during the most wonderful time of the year and asking everyone to bring a little something along can ease the burden.

Shop online

Online shopping is your friend. It allows you to easily look for coupons and promotional codes, and efficiently comparison shop. You're also more likely to stay on task and on budget when you're not doing battle with fellow shoppers and sales staff.

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Eat leftovers

Develop a menu that allows you to work in leftovers after the major celebrations. Every year, Canadians throw out a crazy amount of food that could have been saved. If you plan well, you can reduce your own food waste. 

Be upfront 

The pressure to overspend during the holidays is real, and the best way to diffuse tension is to have frank conversations about it with family and friends. Tell them you need to spend less this year and explain why. It can be helpful to frame it from the perspective of prioritizing other financial goals, such as saving for a house or your child's education. 

Start saving early

It may be too late this year, but by putting away a small amount of gift-buying money every week, you'll have a nice pool to draw from in December.

Return and re-gift

While it may seem tacky, if you receive gifts that aren't right for you, don't feel bad returning them to the store for cash or credit, or re-gifting them. Maximizing your money is about making every dollar count. That $30 gift sitting on your desk you'll never use? That's a wasted opportunity.

Katrina Clarke is a Toronto-based journalist who writes about relationships, health, technology and social trends. Find her on Twitter at @KatrinaAClarke.