How to avoid awkward money situations this holiday season

There are so many wonderful things about the holiday season: the music, the cookies and cocoa, the lights, and of course, all of that time with your loved ones. But, the holidays also bring some pretty awkward situations, especially when it comes to money.

Let’s take a look at a few awkward holiday encounters that you should aim to avoid this holiday season.

You waited until the last minute

It’s no secret that 2020 has done a number on Canadians’ savings accounts and budgets. According to new statistics, 45 percent of Canadians surveyed said they plan to spend less on holiday shopping this year than in past years. So, family gift-giving may be particularly awkward this year if you have little room in your budget for extra spending.

One way to avoid the awkward situation altogether is to put aside a special savings account early for holiday gifts. You can decide how much money to set aside out of every paycheck, depending on your family’s size and how many gifts you will need to buy. Come the holidays; you can dip into your holiday account without worrying about going into debt or not being able to get Cousin Johnny that new Playstation game that he wants so badly.

Another tip to avoid an awkward morning under the tree is to set a family gift budget every year. Gifts are a huge part of the holidays, especially for the kids. But as our families grow, unfortunately, our budgets don’t grow with them, nor does every family member have the same budget. A family budget will ensure that you don’t gift cousin Drew a $10 gift card while he gets you a $300 pair of earrings. This allows an even playing field for all family members. If you have a large family and you can’t afford to buy gifts for 15 cousins and 20 nieces and nephews, consider a family Secret Santa gift exchange. You can set a dollar amount and stick within your budget by only worrying about getting a gift for one extended family member.

The bottom line is, setting a budget well in advance and putting money aside throughout the year will make your holiday spending a lot less stressful and a lot merrier. If you’re not sure how much you’ll need, there are online budgeting tools you can use. Then, you will be able to actually have fun with your holiday spending, knowing that you already have the money set aside and without worrying about going into holiday debt. Nothing ruins the Christmas spirit faster than a huge credit card bill that you can’t pay.

You keep getting pressured to donate to a charity 

With approximately 86,000 registered charities across Canada, and with so many ways to give, there’s no shortage of options for Canadians for charitable endeavours. Around the holidays, there is tremendous pressure to donate to charities.

Whether you can’t afford it, you’ve already donated to several holiday charities, you don’t believe in the charity’s mission, or you simply don’t want to, saying no can be awkward and leave you feeling like the Grinch. A survey by found that 34 percent of respondents said that being pressured to donate to a charity by a co-worker, family member, or friend is the most awkward situation.

Just like we recommend setting aside a special savings account for holiday gifts, you can avoid having to turn down your co-worker’s son’s charity donation request again by saving up throughout the year. Create a savings account, especially for charitable donations. You don’t have to add to this account as regularly as a typical savings account or your holiday gift account. But even throwing $20 in there every few months will ensure that you at least have something to give when the charities come calling this holiday season.

Then, if you go over your charity budget, you have a legitimate reason why you can’t donate.  

Someone asks to borrow money from you

The budget gets tighter than Santa’s pants for most of us around the holidays. But, it may be even tighter for your cousin Joey who lost his job this year. So, he asks you to borrow some cash. Awkward.  

Experts agree that you should never give money you can’t afford to lose. But if you can afford to help a family member and you are basking in the holiday spirit and want to do so, give them money as a gift, not a loan. The holidays are a great time to ensure that you are clear about the fact that it is a gift, and you expect and will not accept repayment.

Once again, if you are using a holiday savings account, you can take money from there to give to cousin Joey instead of scrambling to come up with the cash or having to say no. Another area where a savings account benefits in this situation is, if someone asks to borrow $1,000 from you, but you only have $500 in your holiday budget, you can tell them straight up that’s all you have in the budget without having to come up with excuses or seem heartless and deny their plea for help.

The bottom line to avoid awkward holiday money encounters is to be prepared ahead of time. That will ensure you always have at least something when holiday spending needs pop up, whether it’s gifts or charities. 

At Frugl, we’re committed to helping Canadians reach their full potential by providing a tool that makes saving money effortless and effective. Our mission is simple: to give Canadians confidence in their financial future. Learn more today.

We are on a mission.

At Frugl, we’re committed to providing a tool that makes saving money effortless.

Our mission is simple: To give you confidence in your financial future.