The holiday season is an exciting time for a lot of people. Reconnecting with friends and family and creating lasting memories together—that’s what it’s all about for most of us. However, unfortunately, for many, the holiday season can be a financially stressful period. The pressure of buying gifts and hosting dinners may be overwhelming—even more overwhelming financially than any other time of year.
But it doesn’t have to be that way. With a little planning, it’s possible to enjoy the holidays without the added financial strain. The following five tips can help you prepare for the season, manage your spending, make the most of Black Friday and Cyber Monday, and feel more confident about your finances.
1. Set Clear Spending Limits, and Don’t Go Over Them
First, it’s important to determine how much money you can comfortably spend during the holiday season. You’re almost inevitably going to spend some extra money during the holiday season, but make sure it stays within limits, otherwise you could get into trouble afterward.
For this, creating a budget is the best way to go. Check how much money is coming in every month, how much is going out, and how much you have left after that—which we call discretionary income. From this discretionary income, pick an amount to spend on all the festivities coming your way in November and December. Remember, it’s important to pick a number that works for you. Don’t compare your number with anyone else’s, as they may be in a different financial situation.
Next, you can allocate this money to different categories that are applicable to the holiday season: gifts, decorations, food expenses, etc. Set spending limits for each category and try to avoid going over budget. Here’s a pro tip: see it as a game you’re playing—this will make it way more fun!
2. Don’t Go Shopping Without a Plan
Now that you have your spending habits in place, let’s move on to the actual shopping. But, before the holiday season even starts, try to come up with a plan for what you want to buy this year. If you want to buy gifts for your loved ones, make a list of gifts you want. And, if you’re hosting a dinner for friends and family, try to make a shopping list well in advance.
That way, when you go into the store or start shopping online, it’ll be easier for you to resist the temptation of all the “sweet deals” thrown your way. Making such impulse buys can often add up quickly and make you go over budget. Remember, there’s a reason why those products are discounted so heavily. These stores may want to get rid of the products or use them to lure you into their store.
Taking a moment to reflect on the reasons before making a purchase can help you prevent overspending and stick to your plan, too. A good practice to adhere to is to always sleep on whether to make a purchase or not. If you want to buy something during the holiday season, never make the purchase right away. Put it on hold for at least a day, and if the next day you still think this purchase is the right one to make, then make it. More often than not you’ll find that after some reflection on the purchase, the cons of making it outweigh the pros.
3. Do Your Research Ahead of Time
Let’s build upon tip #2. Now that you have a plan on what you want to buy, it’s a smart move to do your research ahead of time. When you’re in the market for a few bigger gifts, it could be a lucrative practice to do thorough research before ultimately going into the store to shop for the holidays.
Say you want to buy your kid a PlayStation 5. There are plenty of physical and online stores that sell that item—each at a different price. It’s up to you to compare those prices, check if you can use coupon codes, and ultimately make sure you get the best deal possible. This could easily save you money on larger purchases!
4. Avoid Credit Card Debt at All Costs
Now on to tip #4, which is more of a general tip that may apply to any other time of year as well. Try to avoid credit card debt at all costs. Sure, you can use your credit card for your holiday purchases, but make sure you can pay off your balance in full before the next billing cycle to avoid interest charges.
Further, if you can’t repay your balance in full before the next billing cycle, you’ll most likely be faced with late fees, too. And this credit card debt may snowball into more and more debt relatively easily, which is the last thing we want.
Are you struggling with credit card debt and want to help in getting rid of it? Our credit card debt relief resource page may help you out. Or do you want to explore ways to shop for the holidays without using your credit card? Then check out this blog.
5. Set Realistic Expectations
To round off this list of tips, let’s talk about something that’s a bit less actionable, but still extremely important. One way to prepare for the holiday season financially is by shifting your focus from material gifts to having a good time with your loved ones. It’s not all about money!
Creating lasting memories through shared activities such as cooking a meal together or enjoying a holiday movie night may last longer than any material gift that you give. These experiences can be just as meaningful (or more!) without the hefty price tag.
Removing the price tag from the equation has the potential to alleviate a lot of the financial stress you may feel during the holiday season. It’s not about who can buy the most expensive gift or host the biggest party; it’s about creating meaningful memories with your loved ones.
Navigating the Landscape of Deals and Discounts
Reducing financial stress during the holiday season is all about preparation. The more well-prepared you are, the easier it’ll be to navigate the landscape of deals and discounts.
Set a budget for how much you want to spend on the holidays, make a shopping list, do your research, and try to avoid credit card debt. If you adhere to those tips, you can help minimize your chances of overspending during the holiday season. The last thing you want is to be weighed down by the stress of having overspent, right?
And lastly, please remember that the holiday season is not all about spending money. It’s about spending quality time with your loved ones, not about who can buy the most expensive gifts.
