How to Budget and Control Holiday Spending
It’s the most wonderful time of the year!
You may use this time to catch up with friends and family. You might partake in holiday festivities such as gift-giving, family gatherings, celebrations, and outings with friends. The holidays are a time to appreciate and reflect on all we are grateful for. Being able to partake in these festivities is one of the many special parts of the holiday season.
As delightful as these traditions are, we don’t want to leave ourselves with the lackluster gift of a depleted bank account. Without proper planning, holiday season spending can spiral, especially if no parameters are in place. Yet, being cheap or frugal during the holidays doesn’t feel festive or fun. But you can take action to reduce holiday spending while still enjoying yourself.
Here is our “Sleighing Your Spending” framework for the holiday season.
Sleighing Your Spending
1. Set a Budget for Each Person
Before you dive into shopping, take a moment to create a budget. Review your finances and see how much an appropriate amount is to spend on the holidays. Setting a limit for each person ensures the gift-giving is fair and within your budget. Some friends and family may be allotted more than others due to your relationship with that individual. For example, parents often like to spend an equal amount on each child. A budget will help maintain that balance.
2. Make a List (and Check it Twice!)
Once you have established a range of what you are willing to spend, create a list of items that fall within your budget. The internet is such a powerful tool that you can compare prices between brick-and-mortar and online stores to score the best deals.
3. Avoid Impulse Purchases
Retailers often tempt us into purchasing more than we intended. Try to avoid the temptation. Stick to the list you created, and do your best to stay within your limits.
4. Start Shopping Early and Look for Deals
Take advantage of shopping holidays such as Black Friday or Cyber Monday. The best deals often occur well before the holidays begin. Waiting to purchase gifts until the last minute can result in paying increased prices.
5. Gift Experiences
Sometimes, the best gifts aren’t tangible items; they come as memories. Gift experiences, such as a day out, tickets to an event, or participating in an activity together, can often be even better than a traditional gift-wrapped present. Many communities have local events during the holidays, such as Christmas light displays and public outdoor skating, which can make for excellent gifts while being affordable.
6. Ignore What Others are Spending
We often get caught up in comparing our spending with others. More expensive gifts don’t always result in a better gift. Everyone’s budget is different, spending more than your allotted budget to “keep up with the Joneses” is a recipe for overspending.
7. Track Your Spending
It would be best to track your spending diligently to stay on top of your budget. Collect and keep all the receipts in one place. Keeping a running total on your computer or handheld device will help track your spending. Most banks provide transaction histories, making tracking your purchases easier. Tracking your spending is the most important aspect of staying in line with your budget.
8. Review and Adjust Your Budget After the Holidays
Once the holiday season concludes, take some time to reflect. Were you able to follow your budget? Did you have enough money to achieve all your original goals? Did you overspend? Can I make my shopping more efficient? Take time to assess what worked well and what didn’t. From this information, you can elevate your approach for years to come.
By “sleighing your spending,” you can enjoy the holiday festivities to their fullest while maintaining healthy spending habits.
Happy Holidays – And Happy Budgeting!