Holiday Budgeting 101
11/08/2023
Holiday Budgeting 101
It’s easy to get caught up in the magic of holiday spending. But if you’re relying on credit to make holiday wishes a reality, the magic may often fall flat when your bills come due. Before you start shopping try and take the time to create a holiday budget and avoid a post-holiday spending hangover. Things to keep in mind during the holiday season: be realistic, evaluate individual expenses, adjust expectations, and create your list, but check it twice.
Be Realistic
To help curb your holiday spending try to set a realistic but firm budget.
Most people spend around $1,000 on holiday merriment, according to the National Retail Federation. This amount includes gifts and holiday items, as well as spending on non-gift purchases, like family photos or special outfits for parties.
To create a holiday budget, start by looking at what you spent last year. Consider the impact that spending had on your budget—for instance, were you paying off credit card bills for months after the holidays? Did you have to skip the family summer vacation because Christmas was too expensive?
Be honest about the trade-offs that you’re making with your current holiday spending. That will strengthen your resolve to stick with a budget this year.
Evaluate Individual Expenses
As you create a budget, look at each individual expense. Try to be as comprehensive as possible.
- Gifts for immediate family
- Gifts for friends, neighbors, and coworkers
- Travel expenses like gas, flights, and hotels
- Food and party supplies
- Christmas cards
- Postage and shipping
- Gift wrap supplies
- Interior and exterior decor
Add up what you plan to spend and determine whether or not that spending fits inside your budget.
Adjust Expectations
Choosing an appropriate budget may mean you need to celebrate in a different way than in years past. You can arrange with family to do gifts of time and service instead of physical gifts. This isn’t as exciting for younger family members, but older ones may appreciate help with decluttering or organizing spaces in their home, sifting through family photos, or another project.
Spending money on someone or something in the past doesn’t mean you must spend the same amount forever, especially if you have to go into debt to do so.
Make a List and Check It Twice
- Getting organized with your gift giving can help you take advantage of holiday sales and get the best prices on items. Try and keep track of your gift list and spending (there are apps for this).
- You can also try an app to find the best price on popular items. Or, check prices between a few of your favorite online shopping sites. A few minutes searching may save you lots of money.
- If you plan to shop at brick-and-mortar stores, set aside a dedicated day for shopping instead of lots of little trips. This saves money on gas and helps curb impulse buys.
- When you’re finished shopping, stop looking at fliers, email promotions, deal websites, and in-store sale signs. That way you won’t be tempted to buy whatever amazing deal pops up next.
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