How Not To Overspend During The Holidays

The holiday season is one of giving, which often means it can easily become the season of overspending too. You want to make sure you get the best gifts for family and friends. There are still a few ways to make sure you get great gifts without going overboard with the amount of money to spend.

While holiday spending might be extravagant, effective budgeting can help you avoid a month of regret later in January. Know and understand how to begin planning for the holiday season so that you can make the most of them while minimizing the financial impact. Here are a few recommendations:

How Not To Overspend During The Holidays

1) Deciding on a budget

Whenever it concerns holiday spending this season, you should have a firm grasp on just how much money you

are willing to spend on gifts. However, after you’ve determined that amount of money, you’re not finished budgeting yet. During this season, think about where you’re going to spend your money. Buying gifts, like flying and other holiday activities, has a significant influence on your money. To avoid overspending on something you could have prevented, allocate your budget wisely.

 

If you go shopping without a list, you’re likely to buy a few things you don’t really need or you don’t know who to give to.  Making a shopping list of who are the persons you are buying for and gift suggestions for each person will help you stay focused while you’re in stores. You can also just buy holiday gifts for your family members and close friends only. Make these important persons your priority, and only buy gifts for them. Regardless if you ever see something that would be ideal for someone else, keep in mind that you only have enough holiday budget put up for the people who are most important to you. If you feel awful about not being able to give holiday gifts to some people you can do the following instead: create baked goods, make handcrafted gifts, or send personalized holiday cards.

 

While the appropriate amount to spend for holiday gifts depends on your salary (or personal finance sitatuion), cultural traditions, and other considerations, a general rule of thumb is to spend $50 to $100 on a gift for your family (each family member) and $20 to $50 on a gift for close friends (each friend). Meanwhile, the average cost of a holiday gift for a work colleague is between $20 and $50.

 

2) Use an allotted amount of cash only instead of credit cards

You can also stick to a cash-only payment strategy when doing your holiday shopping. Using your credit card to pay for holiday gifts makes it easier to overspend. These credit cards nearly often feature double-digit interest rates, so your $1,000 charge for holiday gifts bought is paid off with a minimum payment that can cost you $1,800 and maybe more.

3) Use credit card rewards and points

Credit cards often offer rewards and points based on how much money you spend and the types of things you like to buy. So, consider inquiring about this with the financial advisors at your bank, and see what reward options they have to offer. Then, consider saving up these points and rewards (which often translate into cash-back to your bank account and gift cards) for the holiday spending season.

4) Creating a shopping list

Having a shopping strategy isn’t enough. It’s equally crucial to stick to your shopping strategy. Creating a shopping list will

help you keep track of your holiday shopping expenses and thus prevent you from overspending.

 

Early in the holiday shopping season, when selection and prices are both at their greatest offers, buy your holiday gifts during the sales. Take advantage of Black Friday and Cyber Monday. Make a shopping list of all of your planned purchases ahead of time to ensure that the total amount spent is within your holiday budget, and then stick to it religiously.

Creating a shopping list will give you a general idea of what you’ll need to pay for.

 

Create a shopping list of all of your anticipated holiday gifts expenses. Consider the following items below:

 

– Gifts for friends and family

– At-work gift exchanges

– Items for gift wrapping

– Price of shipping and delivery

– Gifts for service providers

 

5) Making holiday goals

Before you start looking for holiday treats, take a look at your finances and figure out how much you can afford to spend on holiday gifts this year. Financial experts often recommend that you spend no more than 1.5% of your annual income on your holiday gifts budget. Make sure this combined total fits inside your holiday budget. If you believe you might be able to stretch a little more your financial budget, that’s fantastic! But don’t ever be scared to scale back. You should not go broke just because of buying holiday gifts. The best thing to do is to spend money on things that are truly beneficial for you and your financial circumstances.

6) When to shop

Really shouldn’t dismiss sales fliers in your mailbox or in your email inbox. You might be able to save money on

your holiday shopping if you shop during sales. You may get incredible prices on the newest toys, latest gadgets, and important home items, all of which make excellent gifts for both family and friends and even coworkers. Look through some sales fliers or e-discount codes before you go shopping to discover what items are up on the holiday sale.

 

7) Bring your imagination to life

The holiday season needs a bit more imagination. You can make cookies and other sweet treats, make handicrafts, or come up with other innovative ideas to offer gifts. You don’t need to spend a lot of money during the holiday season to show that you care for your family and friends. Instead, come up with unique and imaginative ways to show your gratitude to the most important individuals in your life. This can help you save money on your holiday budget while also giving you a more personalized gift for each important person you have in your life.

 

These homemade gifts for the holidays are a terrific way to save money while still demonstrating your love for the gift receiver.

Tips To Avoid Overspending On Holiday Gifts

 

Split up bigger ticket items with family & friends.

Rather than giving individual gifts, try splitting up bigger ticket items among family and friends. Rather than paying $25 for an individual gift, you can give a larger ticket item split amongst more people. You save money, because maybe your contribution was only $15, and the receiver benefits with a more expensive item.

 

Buy gifts in sets.

Oftentimes during holidays, department stores run sales where you can get a good deal on a variety of gifts. You’ll see ‘Buy One, Get Ones” or “BOGOs’, and even percentage discounts for purchasing more than one product. So basically, if you can purchase 2-3 candles (or any item) for the price of one, do it!

 

Budget at the beginning of the year.

The point of this tip is that holiday shopping doesn’t always have to happen during the crazy holiday season. Don’t wait until the last minute. Start budgeting in January, either by putting money aside for later in the year OR by starting your shopping earlier in the year. By shopping all year, you can reduce both hassle and costs.

 

Avoid feeling guilty about sticking to your budget.

I know, its easy to feel like you need to get your friends and family more gifts than you can afford. This is especially hard to avoid when dealing with kids. They’re so cute, you just want to get them every little thing they want. However, you’ve made your budget for a reason, because its what you could afford. Do your best to stick to it, and you won’t find yourself overspending this year.

 

It’s all too easy to get caught up in the holiday mood and spend more money than you planned. Setting clear expectations, creating a holiday budget, and sticking to it will help you avoid debt once the holiday celebrations are done.