Nine Tips to Help with Your Holiday Budget

Experts advise the best way to survive the holidays with your expenses under control and your sanity intact is to make a budget and stick to it. If you can do this one thing, your holidays will be less stressful and your finances shouldn’t take a big hit in the coming year with huge credit card debts to be paid off. 

The first tip is to decide how much you can spend realistically. The National Retail Federation estimated that the average American would spent $885 on gifts in 2018. The figures have been steadily rising since the 2008 recession. It’s easy to reach this figure and more unless you look at your finances with a critical eye and a steely heart. Take the long view and don’t overdo it. Don’t forget the old adage: it’s the thought that counts. The credit card trap is guaranteed to cost you hundreds of dollars extra unless you pay it off at the end of each month. It’s so easy to let this bill slide and wind up paying a minimum payment over the year. A better system is to pay with cash only. Put the budgeted amount in an envelope and when it’s gone, it’s gone. 

Second, make a list of everyone for whom you plan to buy a holiday gift. Everyone means children, parents, other relatives, Secret Santas, teachers, mailman, pets and a couple of extras for those you may have forgotten. Then add in wrapping paper, ribbons, seasonal holiday cards, shipping costs, travel expenses, extra food and drink, holiday clothing and decorations. All of these items should be added into your holiday budget to make it accurate.

The third tip is to follow store sales and online sales carefully. Studies have shown that Black Friday and Cyber Monday sales aren’t much less expensive than regular holiday sales. Keep up with prices and shop deals every day. Don’t forget, many stores have price-matching policies. Use your smartphone to comparison shop before checking out. Pick up coupons and watch for free shipping codes. If you are using a credit card, make it pay you by using your rewards card. 

Fourth, don’t keep putting shopping off until the last minute. Procrastination is not your friend. It’s the best way to overspend and stress out. Not only will you overspend, you will begin to resent the whole process and become the family Scrooge.  

Fifth, consider making gifts. Many people, especially those who don’t have access to homemade goodies, are delighted to receive cookies and other specialty items during the holidays. You can also make a coupon book to help a relative or neighbor who can physically no longer handle big chores. If you are a needlework expert, you are ahead of the game if you share your work with others and these will be treasured gifts.  

The sixth way to cut down on spending is to give personalized gifts to each recipient. Try to find gifts that are tailored to the hobbies or secret wishes of the recipient, likely something they probably wouldn’t buy themselves. A pair of tickets to a concert, with a coupon for free babysitting, could endear you to your sister.  

Seventh, if you have to travel a long distance to visit some of your relatives, calculate the travel expense. You may need to reduce the size of your gifts. Remember, visiting with relatives you rarely see should be the goal and not the expensive gifts. 

Eighth, meet with your family and bring their expectations into line. One year, my granddaughter, who was six years old at the time, asked for an iPhone, a computer and a new car. Needless to say, we all enjoyed her display of innocence, and she received toys more age-appropriate. It’s a good idea to remind children that outrageous gifts won’t be possible for whatever reason. Most kids accept reasonable explanations if you take the time to explain the situation to them. If budgets are tight, discuss exchanging names with other family members or even gifts for children only. Even if you have an unlimited budget, these practices can truly reduce holiday stress.

Finally, to take charge of your holiday spending for the coming year, beginning in January, decide how much you want to spend on gifts. Prices are fresh in your mind, and you can make a quick calculation of how much you spent this year and divide this by 12. Save this amount every month and you will be well on your way to a smooth holiday season for next year. Some banks will do this for you, automatically deducting said amount and depositing the money into your savings account. By establishing a holiday savings program, you are demonstrating that you are a financially savvy elf. Happy holidays! ■

Sources: aba.com, bettermoneyhabits.bankofamerica.com, creditcards.com, investopedia.com, moneytips.com and thebalance.com.