Had enough of busting your budget every time the holiday season rolls around? Tired of starting every January buried under a mountain of December bills? It’s time to take control of your holiday spending and find a cheaper way to enjoy seasonal good cheer.
In the spirit of the season, we’re here to help rein in your budget and trim your shopping list with these helpful tips to prevent holiday overspending.
Start with commitment to the cause, and the willingness to stick with your plan
When holiday spending gets out of control, poor planning is often the cause. Going shopping without both a budget and a plan is a surefire way to sink your spending goals. The same thing goes for making buying decisions when time is short and seasonal stresses are piling up. Make sure that doesn’t happen to you by planning your holiday shopping well in advance and building a budget that won’t leave you dealing with debt once the New Year arrives.
Build a budget that works for you
Start by making a list of all your holiday expenses, including gifts, decorations, food, and drink, travel, clothing, and anything else you’ll need. Add up your costs and decide whether you’re comfortable with the amount – one rule of thumb says we should expect to budget about one per cent of our annual salary for holiday spending.
It’s often helpful to split spending totals into distinct categories to get a better understanding of where your money is going. Some financial experts suggest giving yourself a separate budget total for all your different spending buckets, one each for gifts, travel, and food, for example, as this approach can help lead to better control of spending decisions.
If you’ve added all your costs and it looks like you’re spending too much, it’s time to start looking for spending that can be cut out or reduced. Is there a way to get the same gift item at a lower price by shopping around? Can you replace spending on food and gifts with DIY presents and homemade cooking? Will adjusting your travel dates bring down ticket costs? Can you cash in reward points to save money on gifts or flights? The more you can cut before you start, the more wiggle room you’ll have to react if you need to adjust later.
Before shopping, take inventory of your holiday holdings
A super easy way to trim something out of your spending budget is to not need it because you already own it. Most of us store some holiday items out of sight and out of mind for most of the year, meaning it’s easy to forget what we already have on hand.
Before you start shopping for decorations, take stock of what’s already your house and see whether there’s anything you can use (or re-use) this holiday season. Take a quick peek in your pantry, too, in case there are food items that can be cut from your holiday grocery list.
Consider adjusting your gifting habits
For most of us, quality tends to outweigh quantity when it comes to receiving holiday gifts. Instead of feeling obliged to give gifts broadly to extended groups of family and friends, an alternative is randomly assigning one recipient to each person in your gift exchange circle. If you want, you can also suggest a budget limit for gift exchanges. Besides being cost-friendly, this approach can also help people put more thought into buying a meaningful, quality gift for their recipient.
Track your spending
Once you start shopping, make sure you stick to your budget goals by keeping tabs on how much money you spend on holiday items. Some people do this by withdrawing all their seasonal spending needs from an envelope of cash, but you can achieve the same effect with better security by using a prepaid debit card. Whatever method you use, remember your commitment to staying within a budget and resist the temptation to go overboard with holiday spending.