The winter holidays — Thanksgiving, Christmas and New Year’s — come every year, and every year some of us find ourselves spending more than we planned or being faced with unexpected expenses we’re not prepared for and can’t cover. We’d like to share some tried and true tips on how not to overspend on the holidays, how to budget for the expenses you know are coming up, tips for saving up for gifts and celebrations, and where to find good deals to make your holiday dollars go farther this year.
Plan ahead. This may seem obvious but planning ahead and setting a holiday budget is probably one of the best ways to keep your spending under control. If you plan for the holidays throughout the year, setting aside a nominal amount each month in a special account, the impact on your monthly budget is minimal. Even saving just $50 every month ($25 per paycheck if you get paid twice a month) results in a savings of $600 over 12 months. If you’re married and both of you set aside this amount every month, you’ll have $1,200 in that span of time, and that can make for a nice holiday! By setting aside money every month, it takes the pressure off trying to come up with money for the holidays all at once, and you can enjoy the season without worrying about your budget taking a hit.
The same principle applies to holiday trips; if you know you’ll be traveling to a relative’s house for the holidays or taking a family vacation, research the total cost of the trip and break it up into 12 segments, then adjust your budget to save a little bit towards the trip every month so you can keep that expense off your credit cards. You can still carry a credit card in case of an emergency like a missed or cancelled flight, an unexpected delay or detour, or replacing a lost piece of luggage and its contents.
When it comes to gift giving, take the total amount you feel comfortable spending (say, $600) and break it up between the people on your list. Then, track your spending as you shop. If you’ve set a budget limit of $50 per child, stick to it. If you’re armed with their wish lists ahead of time, you can shop for online bargains, sales, and coupons, and keep an eye out for any mailers announcing special sales, rebates, or additional discounts. If you don’t spend your allotted amount, take any extra and move it into another category, such as thank you gifts.
Expect the unexpected. Don’t forget to plan ahead for those last-minute gifts you buy every year, like the office party or Secret Santa gift, the thank you gifts to your local business owners, dentist, hair stylist, etc. The little gifts can add up if you’re not prepared ahead of time for those expenses.
Check out local craft fairs, farmer’s markets, church bazaars, community sales, and school fairs for unique, hand crafted gifts you won’t find in the local shopping mall. For more tips on how to save on holiday activities, travel, and gift shopping, check out our blog post on this topic. The most important thing to remember is that you’ll enjoy your holiday season much more if you don’t overspend out of guilt, peer pressure, or a lack of planning. Even if you go the DIY route and make all your own gifts, you can have a great time this holiday season. The time and effort you put into making special gifts for each person on your list means just as much, and sometimes more, than how much money you spend or whether your gift has a designer tag attached to it.