The holiday season is often marked by over-indulgence — and not just when it comes to pumpkin pie. Between all the merrymaking and gift giving, it’s easy to over-spend, leading to the post-holiday financial blues. A little financial planning, however, can keep your holiday budget in check and help prevent buyer’s remorse come January.
Make a list and check it twice. Make a “must-buy” list and check it carefully. Remember, even small $15 or $20 gifts can really add up. Rather than purchasing gifts for co-workers and friends, consider sending holiday cards, baking cookies or treating them to coffee.
Set a holiday budget. Before you begin shopping, determine exactly how much money you have to spend. Next, set a price limit on gift giving for each recipient on your list. Whether that limit is $25 or $200, remember that it’s not the amount of money we spend on gifts that is important — it’s the memories we make together that truly matter.
Budget for non-gift expenses. Many holiday costs are associated with non-gift items, such as decorations, wrapping paper, or entertaining. When setting your holiday budget, be sure to include these items so there are no post-shopping financial surprises.
Keep track of your spending. A good budget is always evolving. Keep track of your spending as you make purchases so you can determine whether you are over or under on your budget. If you overspent on decorations, cut back on entertaining. Making adjustments now to correct your spending is far less painful than waiting until the bills appear in January.
Use cash. Struggling to stay within budget? Try taking only cash to the store. This will force you to stick to your budget, and the act of handing over all those bills will also help make you more cognizant of what an item actually costs.
Start saving early. Frustrated by holiday shopping this season? Next year, a little pre-planning can help you avoid the shopping blues. Starting this January, put $25 or $50 aside each month in a high-yield savings account. You’ll save more (without feeling the pinch) and build your gift-giving fund.
Skip the mall. Shopping malls and mega stores are designed to provoke impulse spending. It’s easy to go in for one item —and thanks to all those special “buy now” offers—come out with more than you planned or budgeted. Shopping online promotes objective spending and smart purchasing decisions. Plus, it makes price comparison easier.
Shop local. Instead of heading to another big box store this holiday season, visit the locally owned businesses in your community. Many communities even offer incentives for shopping at local small businesses. For example, Austin, Texas residents can benefit from the “Go Local” card, which offers special discounts at participating stores. Plus, buying local directly supports jobs in your hometown. Now that’s some gift-giving you can feel good about!
How are you doing with your holiday budget this year? We’d love to know your financial planning tips for staying within your budget and avoiding the post-holiday financial blues!