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The holidays seem to get here earlier every year, don’t they? It’s okay though because this year we’re coming into the season armed with a plan to reduce holiday spending and a wary eye on the days that just seem to fly by if you don’t watch them.
Holiday Spending Plan
Spending in the last few months of the year requires a certain amount of planning that doesn’t necessarily have to happen in the earlier months. Because a great deal of spending is condensed into a small time frame, planning out how you are going to spend over the holidays can save you a ton of heartache (and bank account shock) at the start of the new year.
Step 1: Make a budget
I’ve talked about the importance of having a budget before, but during the holiday season, it is even more important. The first step to getting your holiday plan in place is to make a budget if you don’t already have one.
If you need a little refresher on the simplest way of making a budget, Building a Basic Budget is the post for you. Once you’ve created your budget, decide how much wiggle room you have for holiday spending.
- 5 Steps to Building a Basic Budget
- Zero-Based Budgeting for Beginners
- Learning about Personal Finance – Books for Beginners
Step 2: Decide how you want to allocate your holiday budget
The holidays come with many different types of expenses – gifts, entertaining, decorations. Figuring out how much you want to spend on each category ahead of time will help you stay on track and avoid overspending.
The bulk of most holiday budgets generally end up in the gift category. Consider trying something new this season with a no-spend holiday (focusing on spending time together instead) or possibly set a group agreed spending max on gifts for your significant other and close social circle.
This is any spending outside of your normal food budget. Most of your monthly food budgets won’t have a feast or two accounted in it (probably? Live your life if it does!) so make sure you include this increase as well.
Mini-pumpkins for everyone! All the little bits of holiday decor for entertaining and making your home feel like a festive wonderland add up over time. Give yourself a limit so that you don’t go overboard buying those glitter-covered turkeys and twinkle lights.
As a cost savings tip, consider reusing decorations from past years or upcycling decorations from the dollar store. Pinterest is your very best friend in reducing your holiday decorations costs!
Step 3: Make a shopping game plan
Now that you know how much you have to spend and how you want to allocate it, it’s time to plan out what you want to get.
Are your gifts going to be store-bought or handmade? In-store or online (account for time and cost of shipping!)? Is it a Black Friday special?
Avoid using credit cards if you can
They make it easy to overspend leading you to overextend yourself in the coming months trying to pay them back down.
Consider giving non-item gifts
Experiences and quality time are chronically undervalued as gifts. Giving your time and attention are an amazingly personal gift idea and doesn’t have to cost much or anything at all.
Don’t overextend yourself
In a similar vein as above, the most important part of your holiday spending plan is the understanding that no one is entitled to you going into financial difficulty over a perceived social expectation. If you are in financial distress no one needs gifts as proof of your affection during the holidays. And if they do then they need to readjust their priorities or be removed from your life.
With a holiday spending plan in hand, go forth into the holiday season with confidence. By planning ahead you can reduce holiday spending excess and start your new year on stable financial footing rather than the financial hangover of “how much did I spend in December?