How to Manage Your Holiday Spending
November 12, 2020
For some people, holiday spending can be hard to control. Whether it’s piles of gifts, plenty of food and drinks, pricey travel costs, or maybe a few new outfits, there are always lots of ways to rack up a big holiday tab in a hurry.
With the COVID-19 pandemic still disrupting daily life, this year’s holiday season is likely to be very different than any we’ve known before. Even so, we’re all likely to spend a little more money than at most other times of the year, shelling out on seasonal cheer and stocking stuffers.
Still, celebrating the holidays doesn’t have to mean blowing massive amounts of money. If you’re looking for ways to rein in your holiday spending, whether this year or anytime, here are a few things to keep in mind.
Budget before you buy
The most important part of any effort to control your holiday spending is a well-planned budget. Start by figuring out how much you can afford to spend this holiday season. One rough rule of thumb is one percent of your annual income (i.e. $750 on a salary of $75,000). Next, make a list of all the people on your gift list, and all the things you’ll need, such as food and decorations. Then, add up how much each gift or item is likely to cost. Now you know whether you need to start trimming some expenses, or whether you’ve still got some wiggle room.
After you make your holiday budget, don’t just forget about it – make sure to use and follow it. If you can, store the budget on your phone, so it’s always accessible, even when you’re out shopping. Keep a record of each purchase you make and track your ongoing spending against your budget targets.
Get gifts online
Chances are most of us won’t be masking up to mingle with crowds of holiday shoppers at the local mall this year. As far as controlling your spending goes, that might not be such a bad thing. Shopping at online retailers tends to help us control the urge to over-buy, avoiding the kind of impulse purchases we might make when browsing at a brick-and-mortar store.
When you do shop online, be sure to compare prices between retailers to find the best deal, and remember to account for shipping costs, if necessary. Also, it’s often helpful to download and install apps that automatically search out coupon and discount codes to save you extra cash on your online shopping.
Save costs by redeeming rewards points
One great way to save some money on your holiday budget is by cashing in points you’ve earned on credit card spending throughout the year and redeeming them for ‘free’ gifts. Points can be turned into flights and hotels, merchandise, even gift cards for leading retailers. Remember, of course, that lots of people are placing orders at this time of year, so don’t delay and run the risk of an item being unavailable, or unable to be delivered in time for your holiday celebration. Click here to discover the types of rewards you can redeem with your credit card points.
Don’t shop when stressed
Holiday shopping isn’t for everyone. Some of us love it, while others find it fills them with dread. But putting off the inevitable isn’t going to make the process any easier, nor any cheaper. Last-minute purchases are likely to cost more as choice dwindles. That’s why it’s best to get an early start on holiday shopping, allowing you to avoid stress and scarcity as the holidays draw near.
Remember what’s important
The holidays tend to be hectic but try to remember that there are lots of ways to share seasonal spirit without spending a lot of money. Whether it’s homemade gifts, volunteering, charitable donations, or something else, there are many different cost-effective ways to warm the hearts of our loved ones. An afternoon baking cookies, decorating the house, and singing carols is often worth as much or more than any gift money can buy. Likewise, DIY gifts like personalized calendars using family photos display a level of caring that store-bought items simply can’t match.
Finally, remember that it’s never too early to start thinking about next year’s holiday season. If you can start the New Year off by putting a little bit of money aside each month, you’ll soon build up a healthy holiday fund.