5 Ways to Budget for the Holidays
5 Ways to Budget for the Holidays
Guest Post by Chloe N. Moore
For the majority of us, the holidays are a season full of opportunities to connect with others and to demonstrate our appreciation for all of the important people in our lives. But along with the celebrations and the merrymaking, there are an above average number of ways our budgets are threatened.
According to the National Retail Federation, Americans are planning on spending over $1,000 on winter holidays. It’s likely that even if you don’t think you’ll be spending that much, you’ll probably be in the ballpark — especially if you don’t take proactive steps against massive spending.
When we overspend during the holidays, we can potentially decrease our joy as stress and anxiety take hold. Plan ahead. It’s the most important thing an individual can do in the interest of avoiding unnecessary financial strain. Take charge of your holiday budget this year by calculating costs ahead of time, and making strategic budgetary decisions.
Ground zero for preparing for the holiday spending season is actually preparing for all of the seasonal financial expenses you and your family can expect to see. Make a list of the seasonal or holiday things that you usually do not include in your budget. List out the extras that you will spend money on during the holidays.
Most of us will need to account for:
- Traveling expenses
- Charitable donations
- Cards and wrapping paper
Extras: Does your family dresses up on Christmas Eve? Take annual Christmas photos? Or throw any parties or get-togethers? Those things need to be on your list.
Decide Your Spending Amount
To budget, you need to decide how much you can and should spend on each area of holiday expenses. You cannot be too detailed in this list. Decide how much you’ll spend on gifts for each individual, estimate how much fuel will be for travel, and make a decision about how much you’re going to donate. Every item on your expenses list should have a monetary amount assigned to it.
Does your regular budget have enough wiggle room to accommodate for all the additional expenses? If not, then it’s time to do some problem-solving.
Can you decrease a different budgetary section? During the holidays, budget items like clothing and entertainment may be covered by the likes of holiday parties. Don’t forget to consider overlap of normal and holiday budget sections. Additionally, if you need more wiggle room, consider dedicating more of something like the clothing or eating out categories of your budget for holiday expenses.
Can you stretch it over multiple pay periods? Sometimes, the thing that makes holiday expenses challenging is that they come all at once. To diminish their collective impact, do what you can to spend portions of holiday expenses in increments. The sooner you begin, the less strain you’ll feel.
Make a Shopping List
Preparation goes a long, long way in regards to safeguarding your budget. If you don’t proactively plan out your spending, the odds are you’ll overspend. We’re all subject to the consequences of impulse buying, and often impulse buys don’t serve our financial goals.
Look at your list of expenses and the amounts you’re able to spend in each area. Then curate of a list of potential ways to meet the needs of both the list and the limits of your budget. For example, list several possible options for gifts for individuals that hit the budgetary mark so that when it’s time to buy you have a game plan.
Look for Ways to Cut Costs
Most of us are doing this anyway, but cutting costs is much easier if you’ve followed through with the aforementioned recommendations. If you’ve mapped out your holiday expenses, you’ll have a clear picture of what needs to happen financially for you to stay in the green.
Watch for sales: If you’ve thought through potential gifts, you’re in a prime position to watch for the right sales and to jump on them without second guessing your decision. Many stores are rotating the sales within their individual departments as the holidays approach. If you pay attention you’ll likely hit the jackpot.
Do things in a cost-effective manner: Consider how you can make each item on your list happen for less. For example, before writing off discount stores as a source for parties, check out their party supplies. Take the time to store holiday decor the right way so that you can reuse it year after year. Before buying new products, consider what you can make yourself. If you’re in charge of the office Christmas party, consider party ideas like an optional gift exchange where people — yourself included — aren’t boxed into a financial expectation.
Sell what you don’t need: Getting rid of excess stuff serves two purposes during the holidays: Not only does it pad your pockets, it also makes room for new things — and for those of us with kids that’s especially helpful. You can sell gently used brand name clothing. You can recycle everything from phones to junk cars.
The last piece of the plan is to track your spending. This way, you won’t be surprised by the state of your finances. Tracking your spending never feels fun in the moment. However, when it’s done in such a way that you’re able to come out on the other side of the holidays with your merry heart in-tact, it will be immensely gratifying.
The holidays have the potential to be one of the best parts of the year for both you and your families. But, they won’t be if you are bogged down by a lack of financial agency and fear over spending more than you have.
You’re not a slave to your spending. Instead, you get to pick how much and when you spend the resources you have. Even if funds are limited, take control via your budget. Decide now what the financial landscape of your holiday season will look like, and then enjoy it.