Follow my five holiday shopping rules to save big — especially my $1 rule to calculate a gift’s true value

Can you keep a Santa secret?

About 10 years ago, I created my Five Holiday Shopping Rules, which have saved me thousands ever since.

This year, (Rule No. 5) my daughter is getting a second-hand doll house for Christmas ($70), and my son is getting a second-hand PS4 with a game ($75).

These five rules have helped me avoid waste, and created opportunities for me to sell and upcycle whenever possible.

With Black Friday and Cyber Monday just around the corner, choose a few rules to try out and save yourself some holiday cash.

Rule No. 1: You do you, boo

Make a budget and a holiday shopping list that feels right for you, without worrying about others’ opinions.

Take a close look at your cash flow and ask yourself, what can I afford to spend without having to accrue debt?

Don’t guess, crunch the numbers using a budget template. Can you scrape together $500? $1,000? $50? Start setting this money aside in a savings account so it doesn’t accidentally get spent on silly trinkets you don’t need.

Make a list of what’s happening this season, who you need to buy for, and costs you need to take into consideration: gifts, outfits, parties, food, drink, gas, babysitting, baking, decor.

Inventory what you already have — duplicate presents for regifting, dresses and shoes, bags for wrapping and baking supplies. That way, what ends up on your list is needed.

Now, put a price tag beside each item and tally it up.

If it’s over budget, you’ll need to cut back or get creative (read on for the creativity part).

Rule No. 2: Use points, gift cards and credits/refund balances first

Work perks, reward and loyalty points can be converted into gift cards and sometimes physical items.

Cash them in and put them toward whatever made it on your holiday list — including groceries and gas.

Locate all your gift cards that have balances on them. They’re probably stuffed in drawers, envelopes, the backs of wallets, in glove compartments and deep inside your overflowing inbox.

Gather these all up, and use them first, before spending any money. Even tiny partial balances can add up.

Black Friday and Cyber Monday (coming up this week!) are a great way to save allowing you to stretch your points and balances even further.

Rule No. 3: Use my $1 Rule to get the best value

Take the cost of the item you are buying (for yourself or someone else) and divide it by the number of times it’s going to be used. If that’s less than $1, it’s generally OK to buy. But, if it exceeds $1, take a pause and really think about whether this is worth it.

The previous owner of the doll house I just purchased second hand, for example, bought it for $259 brand new last winter, and her child only played with it twice. Her cost per use was $129.50! Yikes. My daughter is just starting the “Everything is a doll. Dolls are my everything” phase, and I’m confident that she’ll use it at least 70 times. Having paid $70 for it second hand, that brings my cost per use to $1 (and hopefully less!).

The $1 Rule is a pro-spending rule that helps guide your holiday shopping, rather than restrict it.

But, it also helps prevent purchases that simply aren’t good value, that are poor quality and might go to waste.

Obviously there are exceptions to this rule, such as a special experience you might pay for. But, it’s a great thought-starter as you think about the things you purchase.

Rule #4: Be a deal hunter and coupon clipper

The folks that take time to shop around save the most money because they know where to get the best deals on their wish lists. 

Be this person!

And, avoid Christmas creep, add-ons and upsells at the checkout — those are guaranteed budget busters.

Rule #5: Try the second hand market for buying and selling

One of my students buys exclusively second-hand items for all holidays. With some of her savings, she donates to her local food bank.

I’ve saved thousands of dollars buying second-hand over the years, too.

I supercharge this strategy by selling things, decluttering and purging at the same time. Right now, I’m preparing to sell a sideboard, an old iPhone and iPad.

The money I raise can go toward the holidays, and also into my kid’s RESPs this January, when I can maximize my contributions to achieve the greatest amount of the Canada Education Savings Grant — now, I think that’s a great gift for my kids down the road.

Regifting is another version of second-hand giving, and it’s even less work.

When you take wrapped unused items and find a new purpose for them you’re reducing waste and giving joy.

Just be careful not to awkwardly regift the same thing to the person who gave it to you! 

I don’t know about you, but I can’t wait to see my kids’ eyes light up when they open their presents on Christmas, and to feel good that I didn’t overdo it on spending.

They won’t care if their presents are a mash-up of new and second hand.

What they’ll remember is the joy of it all.

This article was originally published in The Star. Lesley-Anne Scorgie is a Toronto-based personal finance columnist and a freelance contributing columnist for the Star.