Financially speaking, the holidays can be a tricky time. The expense can be great, and managing it all requires sound planning. Between the gifts, trips, parties, and holiday outings, the period of time between Thanksgiving and New Years can be a real financial burden for many families.
Although you want your family to have a wonderful holiday season, the costs can be prohibitive. Planning is the key to having a great time without breaking the bank. Creating a plan and sticking to it can make all the difference.
The sooner you get started, the easier it will be to save money and boost your income.
Think about how painless it would be if you had started saving for the following Christmas in January! It might be too late for that now, but you can still get started before December 15th.
Budgeting for the Holidays
Creating a budget is the first line of defense for getting any financial situation under control. A budget is like a game plan or a roadmap for your holiday spending. With a good budget, you stand a great chance of financially navigating the holiday season with success.
No one likes to make a budget, but it might be helpful to do so for this upcoming holiday season. If you haven’t made a holiday budget before, odds are you’ll be surprised at how much it helps.
At the very least, you’ll know where you stand. The sooner you make your budget, the sooner you’ll be able to formulate your financial plan.
Tips for creating a successful budget:
1. Consider using budgeting tools. Relying on a pencil and notebook can be cumbersome when you consider all the budgeting spreadsheets and software programs available. Even Microsoft is kind enough to provide a free, downloadable spreadsheet for your convenience. Other sites that provide holiday budget advice are Dave Ramsey and Organized Home.
2. What do I anticipate needing to spend this year? Think about the holidays as a whole. For most, that means Thanksgiving, Christmas, and New Year’s. Depending on your faith and family traditions, it might mean something else.
Gifts. Take all gifts into account. It’s easy to remember your immediate family, but what about your friends? Are you attending any parties that will require a gift? What about your coworkers?
Charitable donations. Many of us like to donate time, money, toys, or food to those in need during the holiday season. Include these items in your calculations.
Food. Everyone eats more around the holidays. The special food items add to the holiday spirit. How much will you spend this year above and beyond your normal food budget?
Parties. Are you planning on throwing any parties this year? What is the expected cost? Parties are frequently more expensive than anticipated, so you might want to pad your budget.
Travel. Are you going to visit grandma and grandpa? Will you be going to New York City for New Year’s Eve?
3. Decide how much you can afford to spend. The majority of us don’t have an unlimited budget like Donald Trump. Consider how much you can afford to spend around the holidays without it taking months to dig yourself back out of a financial black hole afterwards.
Assess your savings. How much do you have available for holiday spending without creating financial challenges in other areas of your life?
Are you anticipating a bonus at work? How certain are you regarding the amount and timing?
Is it possible for you to earn additional income between now and the holidays? Can you pick up an extra shift at work? Perhaps you can look for a second job.
Are you able to cut back on your normal expenses and save the difference? Every little bit helps.
4. Go over your budget with your significant other. Do they agree with your numbers? It’s practically guaranteed that your partner will come up with at least one item you overlooked. Try to reach an agreement on the expected holiday expenditures.
5. Make adjustments as you go along. A budget is subject to modifications, particularly with a unique situation like the holidays. Holiday events can be highly fluid. Plans and schedules can change quickly.
6. Keep track. As you’re spending and earning, keep track of where you stand. Does it appear like you’re going to hit all of your numbers? The earlier discrepancies can be found, the better.
Making a budget may not be fun, but it’s a critical first step. Although your budget may evolve over time as other factors come into play, it’s still very important to have a starting point.
Shopping Tips
It’s important to shop intelligently to minimize the financial impact of the holiday season. For many families, gifts are the primary expense associated with the holidays. A sound shopping strategy can make a big difference.
To make the most of your time and money, try using these shopping strategies:
1. Make a list and stick to it. You’ll probably already have a good idea of what you need to buy when you create your budget. You’re likely to purchase less if you take your list on your shopping trips. If you stick to the list, it will be much more difficult to overspend.
2. Plan your trips wisely. There’s no reason to drive back and forth all over town. With good planning, you might be able to hit each store once, in an order that makes sense. You’ll save time, gas, and money. You’ll also be less likely to buy those extras during your travels.
3. Put the credit card away. It’s so much easier to overspend while using a credit card because the bill doesn’t come for a month. You’ll come up with the extra money by then, right? Wrong!
There’s something about cash that makes it much more tangible. When you hand the cashier $100, you really feel like you’ve lost something. Stick to cash whenever possible. You’ll spend less.
The interest on a credit card can be a real financial thorn in your side, too.
4. Start shopping early. There’s no rule that says you have to wait until Thanksgiving to start shopping. It might be too late this year to get a big jump on your holiday shopping, but try buying a couple of items each month next year. By the time the holidays roll around, you’ll be practically finished!
Waiting until the last minute can be both stressful and costly. It’s also possible to run out of money before you’re done shopping.
5. Think about next year. Post-Christmas sales can be amazing. It’s the perfect time to start purchasing for the next holiday season. If you need a new Christmas tree or decorations for next year, this is the time to purchase them.
6. Look for sales. Not many people purchase a newspaper anymore, but the stores still use them to advertise. Pick up a local Sunday paper and look for the best sales.
Keep a pen and paper near the television. You can record the necessary information when you see a commercial related to holiday shopping.
7. Start using coupons. Some people love them, and others hate them. Now might be the time to bite the bullet and take advantage of the savings they provide. Remember, it’s only a good deal if you actually need to purchase it.
Money-saving coupons can be found both in the newspaper and on the internet.
8. Look online. Nearly anything can be purchased online and sent directly to your home or the home of the gift recipient. Gift-wrapping can also be included for a small fee. Unless the item is exceptionally large or heavy, it can most likely be found for less money online.
Avoid the crowds and save money by shopping from the comfort of your living room.
9. Consider used items. Pawnshops and antique stores can have fun and interesting gifts. Vintage items continue to be popular.
10. Look at last year’s model. Each year, manufacturers seem to come out with a new model for every gadget. In many cases, the change to the product is minimal. With a little digging, you might be able to find last year’s offering for cheaper. The savings can be considerable.
11. Keep your receipts. Have you ever made it through the holidays without needing to return at least one item? You might even find that the price has dropped. Many retailers will simply give you the difference. If not, it might be worth the time to return the item and then repurchase it.
No holiday financial plan can ignore shopping and gifts. Know what you’re shopping for and put the credit cards back in your wallet. It isn’t wise to accumulate additional debt around the holidays. You don’t want to be disgruntled when looking back at times that are supposed to be happy.
Keep in mind that the more time you have to shop around, the more likely you are to find a great deal on the perfect gift.
