Holiday shopping can be overwhelming, especially when you’re trying to stay within your budget. While it can be tempting to splurge during the holidays, you don’t want to spend the new year climbing out of credit card debt. By taking some time to plan now, you can spread holiday cheer without digging yourself into a financial hole.
Consider these strategies for managing your finances during the holidays:
- Create a Budget. Consider your current financial situation and how much you want to put aside for holiday spending. Be honest about what you can afford. It’s a good idea to create a list of all the holiday-related expenses you’ll have, such as gifts, décor, travel, and food. Then, determine a maximum spending amount for each category. Most importantly, ensure that you’ll still have enough money to meet your non-holiday financial obligations, like your mortgage or rent payment, and your other monthly bills.
- Communicate With Your Loved Ones. Once you’ve determined what you can comfortably spend this holiday season, you should ensure that your family and friends are on the same page. Being open about your financial situation and goals can help to reduce some of the financial pressure that’s common around the holidays. Be honest and open about what you can afford to spend. You might consider suggesting a Secret Santa or Yankee Swap with your family and friends to help cut down on holiday expenses.
- Make a Shopping List. When you’re out shopping, don’t just buy gifts impulsively. Instead, make a list ahead of time of what you wish to buy, or who you’re buying for, and set a spending limit for each person. There are many mobile apps and online tools that can help you organize your holiday shopping. And remember that a good gift doesn’t have to be expensive. Thoughtful, meaningful, and useful gifts often are the most treasured, regardless of how much they cost.
- Take Advantage of Sales and Discounts. Spend some time looking for coupon codes and comparing prices at different stores. Cost savings can be significant if you know where to look. And consider that some of the biggest holiday deals will likely be available on Black Friday and Cyber Monday. Check the websites of your favorite retailers to see if they have any previews of their upcoming holiday sales. This can help you better plan your holiday shopping to maximize your cost savings.
- Plan Ahead for Food Shopping. Holiday parties and dinners can be expensive to host. Preparing your own food instead of catering can help you cut down on costs, and you can save even more by meal planning and food shopping ahead of time, looking for the best grocery store deals. You might also consider hosting a potluck instead of a formal dinner party, asking your guests to each contribute a dish. This is not only a budget-friendly way to host, but it can help cut down on holiday stress as well.
- Buy Gifts with Cash or a Debit Card. One way to ensure that you stick to your holiday budget is to not rely on credit cards. When paying with a credit card, it can be tempting to spend more than you’ve budgeted for. Paying for your holiday purchases with cash or a debit card can prevent you from racking up holiday debt.
- Track Your Holiday Spending. No matter how you decide to pay for your holiday purchases, you should keep some kind of record of what you’re spending. Whether you track your holiday spending through a budgeting app or on old fashioned pencil and paper, you should have a clear idea of how close you are to hitting your holiday budget.
By making smart decisions with your money this holiday season, you can help ensure that you’re on solid financial footing in the new year. Ultimately, you should remember that the holidays are for spending time with people who matter to you – not about how much you spend on gifts or parties. Bank5 Connect is here to help you take the reigns on your financial future. Learn more about our high-yield savings accounts, interest-bearing checking accounts, and credit cards to help you consolidate debt, build credit, and earn cash back.