It’s the time of year to get swept up in a whirlwind of peppermint lattes, fuzzy sweaters and gift giving. However, you don’t want to wake up on New Year’s Day feeling frantic over where all of your money has gone. The average American spends roughly $700 on holiday gifts and goodies each year. Is it actually possible to save some green over the holidays without turning into the Grinch? Here are the top financial tips to strike a balance between ending this year on a festive note and beginning next year on a strong financial one.
Try not to think of the holidays as one big spending category. Doing so can easily cause you to lose track of your overall spending during the last few months of the year. You should instead aim to divide your spending into categories. Create separate budgets for gifts, events, travel, experiences, food and other things. By planning ahead, then you can determine ahead of time which categories should get the highest budgets.
Start Thinking About the Holidays at the Beginning of the Year
Don’t let yourself be the one who’s scrambling for extra cash once the tinsel is already on the tree. The time to start preparing for holiday spending is actually at the start of the year. Do you always end up coming up short around the holiday season? Create a small holiday fund that you begin contributing to at the beginning of each year. Simply taking a little bit from each paycheck will help you to collect quite a bit of money with very little pain. It will be like getting a Christmas present from yourself once December rolls around.
Shop with a List
Don’t just show up at the store with a vague idea of how many gifts you need to buy. Even Santa checks his list twice after making it! You need to go to the store with a plan if you want to avoid overspending. The same goes for online shopping. Create a physical list before you go online to hunt for presents.
Take Out a Loan Strictly for Holiday Spending
You know that your budget is going to need to expand a little bit during the holidays. This is especially true if you’re planning something like a special vacation with your family. You can actually prevent some post-holiday budget pain by taking out a loan before the holidays that will give you more money to work with. You can then begin smartly paying that loan back as you get into next year. This move will give you some wiggle room and make it easier to truly budget how much you plan to spend during the holidays. What’s more, you won’t be left with a big hole in your finances once January arrives.
Keep Track of Your Spending in Real Time
Don’t wait for credit card bills or bank statements to arrive after your holiday shopping is done. Keep track of every dollar you spend and subtract it from your total holiday budget on a daily basis. Seeing the numbers go down will enable you to constantly reevaluate your spending priorities and readjust as needed. What’s more, you won’t accidentally go over your budget.
It really is possible to enjoy the holidays without feeling like your bills are hovering over your head and threatening to steal your joy. While the holidays can feel like a time when frivolous spending can get out of control, this doesn’t need to be the case. Following the tips above can help you to have fun and be generous without wrecking your financial goals. You’ll even be able to grab that peppermint latte with extra foam while getting your holiday shopping done if you plan the right way. Here’s to creating holidays that are merry, bright and financially sound!