During the holiday period, people tend to spend more than usual because of all the activities and gatherings packed within the period. A proven approach for holiday spending is to budget for it throughout the whole year; specifically monthly. However, if you have gotten this far in the year without a monthly budget for the holidays, it is still not too late. You can set a specific budget and follow through with it.
There are several ways to budget and most people tend to use spreadsheets like excel or even a piece of paper. Some also use Apps for Budgets in general or ones for holiday spending specifically. I personally use the budgeting tool with my financial institution. This way, the tools picks up my spending habits and automatically alert me to overspending. Whatever method you choose, budgeting is essential to holiday spending and should be your first step this holiday.
In order to get your budget started, List all the expenses you anticipate for the holidays; traveling, food, gifts, decorations etc. You will have to also set or decide on a spending limit and then prioritize all the spending categories to what is really important to the least important. After this, allocate funds to each category and be realistic about how much you have to spend. Stick to the following tips during the holidays and you will be in great shape financially.
- Stick to spending that can safely come out of your bank account and not your credit card; cash only
2. Cut down the number of people to buy gifts to the essential ones if you cannot afford everyone
3. Be realistic about how much you can spend on gifts and other holiday expenses; bear in mind that it is the thoughts that count mostly
4. Be on the lookout for sales, coupons and codes to help save money but avoid impulse buying because “it is a great sale”
5. Personalize gifts, DIY gifts and make some cookies to gift
6. Ask family members to each bring dishes for gatherings instead catering
7. Consider less expensive alternatives to traveling by Air like taking a family trip
8. Redeem credit card points for gifts (my personal favorite)
9. Price check everything with your phone before making the purchase and consider shipping costs
10. Don’t wait till the last minute; that will cost!
Christy A. Appiah,
MBA Finance, CRPC®, AFC®