The holidays are a beautiful time of year, but getting hit with credit card debt shortly thereafter is never fun. Alleviate future stress by creating a holiday spending plan – and stick to it. If you’re not sure where to start, use this guide to help craft your budget. Your wallet will thank you!
Determine How Much You Need to Spend
Before the holidays are in full swing, determine how much you’ll need to spend on everything from increased energy bills to cookie costs. This will allow you to allocate funds to set aside in advance, and will give you time to start saving up. Everybody’s holiday experience is different, but some common categories you should count ahead for include:
- Presents for family members (decide how much to spend per person)
- Gifts or goodies for the office
- Clothing for holiday parties, such as a cocktail dress or ugly Christmas sweater
- Airline or gas fares for any traveling
- Food for baked goods or any holiday meals you might contribute towards
- New décor for your home (wreaths, Christmas tree, lights, etc.)
- Gift wrap and postage
- Holiday photos and greeting cards
- Charitable offerings
Be realistic with how much you can spend. Try listing these categories in order of priority and allocate your funds appropriately. For example, if you decide decorating is more important than dressing up, you might have to rework that ensemble from last year’s festive soiree.
Keep Yourself on Track
Setting a spending limit is just the beginning. Budgeting for the holidays will require diligence and discipline. Set a weekly reminder on your phone to check in with your number using a budgeting app like Qapital. If you’ve overshot your allotted weekly spending, make the necessary adjustments and spend less on your lowest priority. Consider how much you spent last holiday season, and any regrets you might have about your spending activities. Did you need to buy anything last minute? Could you have saved money by planning ahead?
Give Up an Indulgence
To save money and fluff up your fall back net, consider nixing some regular indulgences. Even small spending purchases, when made multiple times throughout the week, can add up to a big number. Here are a few ways you can add to your holiday spending account by swapping some indulgences with low-cost alternatives:
- Brew coffee at home instead of stopping by the coffee shop everyday
- Rent DVDs and watch movies on the couch rather than the theater
- Browse thrift stores versus department stores
- Cook dinner and eat at home instead of going out to restaurants
- Cut cable and rely on streaming services such as Netflix or Hulu
- Skip your monthly gym payment by exercising at home or outside
Do Your Research
Shopping around online can positively impact your budget. Surf different websites to research and compare various benefits, features, prices, and any available rebates. While comparison shopping online, be sure to look for coupon codes and figure out which retailers offer free shipping or any other incentive that will keep costs down. This will ensure you spend the least amount for the best value on your big-ticket shopping items.
Commit to Cash
Most people use credit cards with reward points to finance their holiday purchases, which can lead to a slippery spending slope. If you rack up a bill you can’t afford, you can incur late fees and interest charges. Avoid the credit card blues altogether by committing to cash this holiday season. If you don’t have it, don’t spend it.
The holidays take place in November and December, but the wrong spending habits can affect your finances into the New Year. Be proactive, make a list – check it twice – and budget as a gift to yourself. Stay true to the holiday spirit, and don’t let the weight of a restrictive budget get you down. If you focus on spending time with family and friends, you’ll care less about cutting costs.
About Carson Derrow
