Black Friday and Cyber Monday may be behind us, but the holiday spending season is in full swing. If you’re on a budget managing money this holiday season, hello overwhelm.
There’s the stocking stuffers, tree trimmings, outdoor lights, holiday cards, and festive treats. Then, add in all the fixings for Christmas dinner. And all that’s before we even think about the main focal point of our spending: the gifts.
The cost of the Christmas shopping season is expensive and it rises every year. In fact, according to the National Retail Federation Reports, the average American will fork out over $1,000 in the frantic weeks leading up to Christmas, many borrowing to meet the season’s costs.
However, by spending wisely, the season doesn’t have to break the bank. If you’re managing money this holiday season – and deciding whether you can afford that “must-have” gift – here are 8 tips for keeping your spending under control.
1. Make a budget
There are a few ways to create a holiday spending budget. You might want to establish a total spending cap, or allocate a specific amount to each person you buy for. Be sure that you are realistic as you plan. For instance, you might budget $25 for each of your siblings, but find that the gift you want to buy costs more like $50. Spending overages can cause frustration and trigger stress. If possible, build in a little wiggle room based on what works for your finances.
2. Track your spending
All of your efforts that went into creating a budget and managing money this holiday season are wasted when you don’t keep track of it. You can track your spending in a spreadsheet, or keep your receipts, or even write the costs down in a paper journal. Check your totals several times over the weeks leading up to Christmas and adjust as needed.
3. Prioritize the extras
Gift giving is often the largest expense during the holidays, but don’t forget to budget for the little things you spend on throughout the season as well. For instance, stocking stuffers, parties, lights, the tree, decorations, travel expenses, food, charitable giving, and more. What may start as small additions to your spending, can turn into a major budget buster.
Add some money into your budget for unexpected costs and determine where you can prioritize. Do you really need to purchase gifts for co-workers? Can you get by with the lights and décor you already have? Are you comfortable turning down a gift exchange or two? Can you turn Christmas dinner into a potluck affair?
4. Remember: It’s the thought that counts
All the time and effort we put into the holiday season is what makes it so special, but seeking perfection in our gift-giving and tradition-celebrating can be a financial and mental burden. Remember, it’s the thought that counts. Watching a movie at home, touring your neighborhood’s Christmas lights, homemade treats, or a potluck dinner with extended family can be just as memorable as extravagant gift giving.
5. Narrow your gift exchange list
In addition to your immediate family, you may have parents, siblings, nieces and nephews, cousins, and co-workers. Buying for the holiday season can quickly spiral into a huge expense. Instead of buying for each person, consider ways to narrow your list. Some do this by pulling names out of a hat; you buy for one selected family member instead of every family member. There are families that choose to buy only for the children. And others have decided to funnel their gift-buying resources into a charitable experience instead.
6. Set expectations
Use the holiday season to teach resilience and flexibility in your family. While your child’s classmates may be attending expensive holiday performances and receiving high-dollar gifts, take the opportunity to talk to your kids about realistic expectations and remind them the real meaning behind the season.
You might consider explaining that a request for one “big” gift might mean fewer total gifts. Or explain that your family is choosing to take a trip in place of a gift exchange.
Helping youngsters understand budgeting and why you can’t always splurge are valuable moments for teaching financial literacy.
7. Distribute the costs
Much of the burden of managing money this holiday season is in the pace of spending. Consider making your gift-buying list mid-way through the year and distribute your expenses over several months. You may find it more manageable for your budget to spend $100 a month over a six month period than to spend $600 in a matter of weeks.
8. Tap into resources for assistance
If you are a new parent or a parent with young children, and the joy of the season feels buried in holiday overwhelm, consider participating in our Home Visit program. Our Home Visitors comes to you to answer your parenting questions, help you manage day-to-day stress, and coach you along in your parenting journey. The program is free and open to everyone, regardless of income or background. Our Home Visitors can help you spend this season connecting with family and friends and strengthening your support network.
Finally, if the cost of the season feels impossible, there are a number of other community resources for assistance. Here are several in Gallatin County:
- Free financial management course
- Heating bill assistance
- Down payment assistance
- Emergency food assistance (5 to 7 day supply)
- Transportation services for citizens 50+ or who have disabilities
- Help staying in your home, car, or job
- Repairs for low-income homes
- Household budgeting
It’s easy to get caught up in the over-spending mindset during the holiday season. However, if you put a plan in place now, you can celebrate the New Year with joy and optimism rather than dreading the bills.