The holiday season can be a whirlwind of gifts, food shopping, travel, and other festive expenditures. On average, Americans tend to spend more during these merry months, which can easily lead to straining budgets or even accumulating debt. It’s crucial to manage your finances wisely during this period to ensure you step into the new year with a stable financial footing.
Here are some indispensable tips to assist you in budgeting for the 2023 holiday season:
1. Review Last Year’s Holiday Spending
Reflecting on the previous year’s expenditures can offer insights into your spending habits and patterns. By understanding where you went over your spending limits last year, you can make more informed decisions this time around.
2. Set a Budget Before You Start Spending
Budgeting is the cornerstone of financial management. Before the first coin leaves your wallet, have a clear picture of what you intend to spend. Break it down further when creating a holiday budget by considering these:
- Per Person Gift Budget: Determine a set amount for each person on your list. This not only ensures equity but also prevents overspending on impulse.
- Entertainment and Food Budget: Parties, dinners, and other festive events can add up. Establishing a separate budget for these can help you stay on track.
3. Plan for Unexpected Holiday Expenses
Every holiday season, there are always unforeseen costs that creep up—whether it’s a last-minute gift or additional food for an unexpected guest. Set aside a small portion of your budget for these unpredicted expenses to avoid straining your finances.
4. Limit Your Gift List
Remember, it’s not about the quantity but the quality. Instead of buying holiday gifts for everyone you know, consider narrowing down your list to close family and friends. Alternatively, group gifting or Secret Santa arrangements can be a cost-effective way to exchange presents.
5. Shop Early
The holiday season can be a financially stressful time. Procrastinating only adds to this stress. The longer you wait, the more pressure you’ll be under, and being emotional can lead to holiday shopping decisions that cause you to overspend. Do your best to avoid impulse shopping. Once you find a gift for someone, don’t continue looking.
6. Keep an Eye on Coupons
Coupons from email mailing lists and promo codes found online can help you spot the best deals. Be sure to shop around first to know whether you’re getting a good deal on a particular item. Some people are tempted to make up the difference and buy additional gifts, but saving is something to be proud of—you may even end up under-budget.
7. Compare In-Store and Online Prices
It pays to comparison shop! In today’s digital age, your smartphone can be a powerful tool for comparing prices when physically shopping in a store. By quickly checking online, you might find better deals elsewhere.
Additionally, it’s always a good idea to ask if they offer price matching. Many retailers will match or even beat a competitor’s price, ensuring you get the best deal possible.
8. Beware of Black Friday & Cyber Monday Mark-Ups
While these sales events can offer genuine deals, not everything is a bargain. Retailers sometimes mark up prices only to give a “discount” on the sale day. Be discerning and do your research to ensure you’re genuinely getting a deal.
9. Don’t Overspend on Sales
Speaking of Black Friday and Cyber Monday—while holiday sales should be embraced, jumping at every sale can increase your holiday spending. Stick with your plan and stay within budget. If you find an irresistible sale and a great discount, pocket the holiday savings if possible.
10. Prioritize Thoughtful Over Expensive Gifts
It’s the thought that counts. Instead of breaking the bank for a flashy gift, consider what the recipient would genuinely cherish. Personalized, hand-made, or experience-based gifts can often mean more than pricier alternatives.
Avoid buying expensive items the person will hardly ever use. A more affordable gizmo that’s
more useful to them is better. Be creative with hand-made gifts, such as framing a child’s drawing, or offer your time to do yard work, babysitting, or prepare dinner—any service that would be of help to the recipient.
11. Use Cash or Debit Over Credit
While credit cards can offer rewards and are convenient, it’s easy to lose track of your spending. Using cash or a debit card can help you be more conscious of your expenses and prevent accumulating debt.
Contact The People’s Federal Credit Union
Based in Amarillo, our Texas credit union offers savings and checking accounts, low-interest rate loans, and a variety of financial services. View the latest rates, check on your financial wellness, and see whether you have a handle on how to budget your money during the holidays using our online resources. To learn more, call 806-359-8571 today.
