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thirty and counting

‘With my family and my loved ones, before Christmas rolls around, we’re very open – we have a pretty frank and open discussion,’ says Jonny Woychyshyn, a 33-year-old chartered professional accountant in Barrie, Ont., who blogs about personal finance issues.J.P. MOCZULSKI/The Globe and Mail

Jonny Woychyshyn admits he's a late holiday shopper. He hits the stores a couple weeks before Christmas, "if that." But he makes sure he's prepared for the season in other ways.

"With my family and my loved ones, before Christmas rolls around, we're very open – we have a pretty frank and open discussion," says Mr. Woychyshyn, a 33-year-old chartered professional accountant in Barrie, Ont. To hold back from excessive holiday spending, they set expectations in October or November: Will they, or how will they, exchange gifts? Will there be a spending cap?

"It takes a lot of pressure off you," Mr. Woychyshyn says. "It helps you budget."

For people early in their careers, long-term saving habits may have just formed. Bending the unwritten rules of saving becomes remarkably easier around Christmastime; dipping into otherwise untouchable pools of savings seems more justifiable when it's for a gift for a loved one or a trip home. When this urge rises, Mr. Woychyshyn and others suggest, it is more prudent than ever to set a budget and recast your focus to the longer term.

"Christmas, as much as people don't realize it, is a discretionary spend," says Mr. Woychyshyn, who writes about financial independence on his blog, The Wealth Brick Road, and fields questions from others his age about wealth-building. Many of them have reached the point where they can comfortably tuck away income for retirement; if the temptation comes up to pull from those funds, he has a warning: "You shouldn't even think about it."

Even at Christmas? "You'd be doing yourself and your loved ones a disservice by hurting yourself down the road so you can give them a material item."

When you start saving, Mr. Woychyshyn suggests that you put aside some money regularly. The amount doesn't have to be huge. "It really is all about setting up a habit, so when you do have that money, you're in a position to save," he says. "Or know how to save, what to invest in. That's really what's more important, rather than putting large sums away."

Young Canadians have a lot going against them – the defined-benefit pensions of their parents' generation are scarce, and hot housing markets in attractive cities have held many back from buying a first home.

Sandra Abdool, a Burlington, Ont.-based regional financial planning consultant with Royal Bank of Canada, agrees with Mr. Woychyshyn that saving on a regular basis is more important than how much: "If they can get into the habit of saving, even small amounts on a regular basis, the routine is set," she says.

Putting $25 a month into a tax-free savings account can start such a habit, Ms. Abdool continues, and should grow with a person's salary and career into various accounts for various needs.

Numbers provided to The Globe and Mail from RBC's 2015 RRSP survey found that retirement saving shifts as a priority in one's 30s. Among 2,217 respondents, it was the top financial priority for just 35 per cent of 18- to 34-year-olds, behind debt payments, rainy-day spending and home ownership; for the next bracket, 35- to 54-year-olds, retirement savings shifted to priority No. 1.

RBC also conducted a postholiday spending poll, released last January, which found that unintentional excess spending also declines with age. Just more than half of 18- to 34-year-olds overspent at Christmastime, the bank found, versus 38 per cent of 35- to 54-year-olds.

It's hard to get every client to set up a detailed monthly budget, Ms. Abdool says, but at minimum they should plan for "big-bucket" expenditures as far ahead as possible. Not just Christmas, but things such as vacations or a new car – they can all cut into your longer-term savings without prior planning.

And this is the age when planning ahead becomes more pressing. "Usually it's the early 30s when [clients] start saving in the long term," says Tyler Pfeiffer, a certified financial planner with First Foundation, an Edmonton-based financial services company. "They're more established in their career and have stability."

At this stage, Mr. Pfeiffer recommends his clients set up automatic withdrawals for accounts with both long- and short-term goals: retirement funds into an RRSP, emergency funds and discretionary savings into something easier to withdraw from, like a high-yield savings account. "The interest rates aren't great, but they're better than nothing."

This helps bypass any awkward surprises, which can be just as unpleasant on a bank statement as they are on Christmas morning.

"There's nothing worse than getting a massive, extravagant gift from somebody, and you reciprocate with socks and underwear," Mr. Woychyshyn says. "It opens up the possibility for resentment and guilt, which is really against the spirit of Christmas."

There are other benefits to winding down materialistic expectations.

"I couldn't tell you what I got for Christmas growing up or even what I got last year, but I can tell you who was over for Christmas and what we ate," Mr. Woychyshyn says. "You're going to remember those traditions a lot more than the toy you got for Christmas in 2016."