Are you excited for the holidays – gifts, lights, entertaining, dinners and decorations? You are not alone. Many Americans love to celebrate the holidays, but few enjoy the financial pinch you experience after holiday spending well into the new year. If you don’t want to break the bank this holiday, take time to plan and budget for winter holiday shopping.
Money and finances can be an even bigger source of holiday strain. Holiday gift giving is often fraught with comparisons, excitement, and disappointment. We often go over budget because it is such a pleasure to make someone happy with a gift and so distressing to give a gift that disappoints.
Overspending on holiday gifts, parties and travel can leave you stressed and in debt going into the new year. However, you don’t have to feel like a slave to the holiday crowds, social commitments with family or friends, and wish lists. Here are 6 ways you can create a budget, cut your spending and de-stress during the holiday shopping season.
6 Ways to Managing Your Holiday Spending
1. Set a Budget for Holiday Spending
Sit down and create a budget for holiday shopping before you head to the malls this year. Gifts, large or small, can add up quickly, leaving you with a pile of bills and hefty debts at the end of the season. Setting a budget for the holiday season is a good starting point for keeping cost low and debts at bay.
Remember to make your holiday budget a part of your larger financial plan as a portion of your discretionary income. Determine how much you can realistically spend overall, set a maximum amount for each person on your list, and try to stay within your budget limitations. Some debt may be inevitable, however, do not jeopardize your personal savings, retirement or children’s college fund to get the latest and coolest expensive presents.
2. Consider Trimming Your List
Do you really need to exchange gifts with everyone in your office? Do all the adult in your family need an individual gift? Make a list of all the people you intend to buy for and how much you intend to spend on their gifts, then take a hard look at your list again and consider making some cuts.
Try doing a holiday gift exchange at work so you only need to purchase one moderately priced gift rather than 30 small gifts. And you can limit family lists by giving a group gift to certain members of family (couples or as a unit) rather than individual gifts. You may find that other members of your office or family share the desire to save money too.
3. Plan Your Shopping Strategy
Once you have made your budget and checked your list (twice), it’s time to tackle the shopping mall. It can be tempting to toss your budget rules aside and buy what is being advertised or promoted in intelligently designed holiday retail displays. Then comparison shop in advance, online or in the mall, to see which stores have the best prices on the items you want to buy.
Here are a few ways to save on holiday shopping:
- Check each store you intend to shop at for special discount days or weekends.
- Use coupons found in your local paper or online and membership discounts in-store.
- Take advantage of free shipping, free gift wrapping and free giveaways.
- Buy gifts throughout the year (at reasonable prices), not just during the peak season.
- Eat before you go shopping. You may be tempted to buy extra snacks or specialty coffee drinks as you shop but this need to be accounted for in your budget or passed on altogether.
During the holidays, stores are filled with dazzling gift displays and advertisements to tempt you into spending more than you intend. That is why it’s important to set a budget and make a list before heading to stores so that you have some spending guidelines. Employ some smart shopping techniques to take advantage of discounts, don’t browse unnecessarily and only buy what you intended.
4. Donate Your Time or Services for a Special Gift
Rather than buy everyone a gift, get creative and consider donating your time, offering your services or making special DIY gift for people on your list. These little gifts often cost little or nothing at all. By using your creativity, you may be able to come up with some truly memorable gift ideas that won’t bust your budget.
Examples of DIY gifts:
- Babysitting
- Cooking Lessons
- Household chores or repairs for senior relatives and/or neighbors
- Photograph albums, calendars and other homemade mementos
- Personalized ornaments, crafts and homemade treats
- Track Your Holiday Spending
Part of budgeting is tracking your spending. Track every purchase and note how much was spent as you go along to help you stay on budget. If you find you’ve spent too much, reassess your plans and decide how you can cut back on some gifts. If you are making gifts or donating time, track the cost of the materials you are using.
There are many methods for recording your expenses – in your check register, online, smartphone apps, etc.. Find a system which works well for you. By following these steps, you’ll have more control over your budget and no unpleasant surprises when you open your bills in January.
6. Set Deadlines for Paying Off Card Balances
One guaranteed way to stay on budget this holiday is to pay cash (or use debit cards) for gift purchases, making it impossible to run up credit card debt. If you are short on cash, use the credit card that has the lowest interest rate or best bonus rewards so you can minimize the balances you will owe.
The longer it takes you to pay off bills for holiday shopping, the more interest you will accrue to run up the total owed on your credit cards. Set a deadline—such as February 1 or before tax day in April—for making the last payment on your holiday bills. Keep that deadline in mind as you create your gift budget.
Find Time to Enjoy The Holiday
The holiday season is stressful enough with demands from work, family and friends, not to mention other social commitments for volunteering and travelling. Try to plan ahead as much as possible, avoiding last-minute buys which will cost more than you have budgeted for, and remember to enjoy the season.
Maintain your daily routine to keep stress levels low during the hectic holiday months. Take a walk or go to the gym to help you de-stress. And seek moral support when heading to the stores to help you take on track with budgeting and time.
In the end, the holidays are all about celebrating and spending time with friends and family. If you feel you are getting stressed out by holiday shopping, stay focused on the joys of the season and spending time with loved ones. And remember that it’s much easier to keep spending down and stick to your budget than it is to carry and pay off debts. Start off the new year on the right financial foot by managing your holiday spending with discipline.
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