We all struggle with staying on budget during the holidays. You want to please everyone in your life by giving them the best, but if you do so, you may end up overspending, leaving you broke and feeling depressed. You start shopping without a plan and the next thing you know you have more gifts than people to give to and you’ve completely lost track of how much you’ve spent. Matter of fact, you’re too scared to even add up how much you’ve spent!
I totally understand your struggle because I’ve been there. I would start my holiday shopping with a plan to buy gifts for 5 or 6 people, and by the end double my list as a I remembered more and more people “I had to get a gift for.” Then I would buy gifts without really considering how much I was spending per person. Sometimes I wouldn’t even give out all of the gifts.
At some point I realized I had to make some changes if I wanted to keep my budget in check and head into January with enough money to continue paying down my student loan debt and cover my day to day expenses. But I needed to do it in a way that allowed me to give to the people I cared about the most, without compromising my financial goals.
Over the years, I’ve come up with six tips to keep my holiday budget on track.
One –
Determine how much you want to spend in total BEFORE you start shopping. Look at your overall budget to see what you can actually afford and then stick to that number. That number shouldn’t be your credit limit, but how much can spend and not put yourself in financial danger.
Two –
Create a list of people to shop for and then reduce that list. Keep in mind that you don’t have to buy a gift for everyone you’ve ever met or everyone in your office. Really think about the people you care about the most that you really want to honor.
Three –
Assign everyone on your list a dollar amount totalling your budget amount. You’re basically creating a zero-based holiday budget. The more you spend on one person, the less you can spend on another and vice versa, as long as the total remains the same, or less than the overall budget.
Four –
Put your holiday money on a gift card like Amex or Visa or try the Chime card, which is a free checking and savings account. This way there is no chance that you are spending money that is for your bills, savings or investments “accidentally” on gifts. Also, you’ll avoid using your credit card. They say credit cards are for emergencies, and Christmas is by no means an emergency!
Five –
Start putting money away TODAY! Realistically, you should put money away every paycheck throughout the year in a holiday sinking fund, so it’s less of a financial burden. BUT, it’s never too late to take money from your paycheck to put it in your holiday savings account so that you don’t use that money on other things and can have enough for the holidays.
Six –
Do a white elephant. It’s a gift exchange game where everybody brings one gift. Everyone is randomly assigned a number and goes in order picking gifts from the pile. The person that picks next in line can steal from what was picked earlier or pick a new gift. My family and I played this game one year and it saved so much money. Instead of people feeling like they had to come over with 12 gifts, or 12 cards with money, they just had to bring one gift that cost no more than $10.
By following these six tips, you can keep your spending under control this holiday season and avoid high credit card bills in January. You can go from anxious about holiday spending to confident that you have everything under control!
