Before you hit the mall or organize a big party for the next month, it can help to have a comprehensive plan in place so you know exactly where your money is going this holiday season – that way, you can ring in the new year with celebration rather than panic. Here are several ways to keep your spending under control this December.
1. Make a Budget
There are a couple different ways to set a holiday budget. You might want to establish a general spending cap, or try allocating a specific amount to each person on your gift list. Be aware, though, that while making a holiday budget is great, it can go sour in one of two ways:
- Setting a Budget That’s Too Tight. While setting a tight budget always starts with good intentions, an unrealistic one can do more harm than good. Without a little room for last-minute purchases, you can end up very frustrated. In fact, you might get so frustrated that you just toss your budget out the window. To prevent this from happening, look over your numbers. Don’t just pick numbers out of thin air – really think things over to ensure that you make the right decisions.
- Forgetting the Little Things. Gift giving is a huge expense during the holidays, but don’t forget the other costs you incur throughout the season. Parties, travel expenses, charitable donations, and holiday-themed activities can all add up to destroy a budget. If possible, add some money into your budget for unexpected costs so you’re not left scratching your head.
2. Track Your Spending
Your budget does no good if you don’t effectively track your spending. Keep a separate Christmas fund in a dedicated bank account. This makes it easier to separate holiday spending from regular, day-to-day expenses. Spreadsheets are also an excellent and accurate way to track your holiday expenditures. By establishing a budget and entering your real expenses, you can easily keep yourself on track. Just be sure to remain diligent.
3. Cut Back on Extras
Getting lattes piled sky-high with whipped cream, splurging on a pair of shoes for yourself, paying for a photo with Santa – we’re all guilty of indulging a little more than we should simply because it’s the holiday season. However, you can’t get stuck in a trap where constant spending on “extras” eats into your budget.
Cutting back on those extras can have a big impact on your bottom line. That money could have paid for a few Christmas gifts or a generous donation to a charity of your choice. Before you splurge on a little treat or “extra” for yourself, be sure it’s really worth the price.
4. Use the “Secret Santa” Method
Not only does a Secret Santa experience help relieve some of the stress and financial burden of exchanging gifts with every member of my family, it gives you a chance to talk about the importance of service and giving during the holidays.
5. Choose Cheaper Traditions
Traditions are what make the holidays so special, but they can be a financial burden. If your traditions include holiday travel, paying for a special attraction, or surprising your kids with extravagant gifts, you might find yourself going significantly over budget in the name of family.
While traditions are important and admirable, they don’t have to be expensive to be memorable. In fact, you might find that your kids prefer the cheap stuff to the grander gestures. So many activities and traditions are inexpensive, or even free – you just have to know where to look. By making cheaper events and traditions part of your celebration, you can save money without skimping on the festivities and memories.
6. Take Care around Sales
Holiday sales can be an epic opportunity to save money – but be careful. Not all deals are created equal, and some may not even be truly discounted, as some stores keep prices the same but simply mark items with a “sale” sign.
Always comparison shop before you purchase an item during a sale. Or, if you tend to fall victim to the festive atmosphere of a store and make unwise purchases, try shopping solely online. You can snag great deals and use promo codes to get a lot more for your money.
7. Know When to Stop
When your list is finished and you’ve checked it twice, it’s time to stop shopping. Know when you’re finished, and avoid stopping by the mall “just to see what they have” – this can lead to making poorly planned purchases and blowing your budget.
8. Get a Head Start
Start planning a credit card payoff strategy if you used plastic to finance your festivities. In a perfect world, you wouldn’t have put anything on your credit card that you couldn’t pay off in a month, but if you went overboard, commit to a payment plan that eliminates your balances within the next three or four months.