The holiday season is the perfect time to keep budgeting high on the agenda. Holiday budgeting means planning and limiting your holiday budget in order to avoid disappointment and stress. It will help you prevent excessive spending on gifts and holidays and help with managing your financial affairs by the end of the year. In 2021, the average American consumer spent $999 on holiday gifts.
The holidays are upon us and it can be tough to stay on budget. Here are a few tips to help you stay mindful of your spending this holiday season:
1. Make a list of the people you need to buy gifts for and set a budget for each person. This will help you avoid overspending on any one person.
2. When shopping, stick to your list and don’t be tempted by all the holiday sales. Impulse buying will only put a bigger dent in your wallet.
3. Get creative with your gifts! Instead of buying something new, try making something yourself or repurposing something you already have. DIY gifts are often more thoughtful and personal than anything you could buy.
4. If you’re traveling to see family or friends book your travel well in advance to get the best deals. And remember, the cheapest option isn’t always the best option – sometimes it’s worth spending a bit more for peace of mind and a stress-free trip.
5. Finally, don’t forget to set aside some money for unexpected holiday expenses like extra tipping, hostess gifts, or last-minute shopping trips.
The U.S. consumer is expected to spend about $1,000 on holidays in 2022. The forecast is for bigger retail sales, analyst projections suggest a 7 to 9 percent increase in holiday shopping during 2021.
It is an enormous chunk from the bank accounts for the majority of the family and can create stress budgeting for the holidays. If your holiday spending is important to you, then make it a priority and set a reasonable budget to cover expenses.
The holidays are a time when many people spend more money than they planned. This can put a lot of stress on your budget, and ruin all the hard work you put in throughout the year.
Luckily, there are some things you can do to stay on budget during the holiday season. In this blog post, we will discuss some tips for staying on budget during the holidays. We hope that this information will help you have a happy and affordable holiday season!
Creating a holiday budget
Making a budget for holidays is similar to generating a house budget. Figure out what money is needed. If your money is not the same as your expenses, go back and check. It can be done by hand or you can use accounting software like Tiller or Personal Capital as an aid for the calculations.
First, make a list of all the expenses you anticipate incurring during the holiday season. This should include everything from travel costs to gifts and decorations. Once you have a comprehensive list, start assigning approximate costs to each item. This will help you to get a better sense of how much money you will need to save.
Next, start setting aside money each week or month specifically for holiday expenses. This will ensure that you have the funds available when you need them. Finally, be sure to leave some room in your budget for unexpected costs.
Adjust the Numbers
When you combine the amounts you allocate for all the items in your list, it is possible that the total may exceed what you specified. You can tweak a number to make a budget. This could mean reducing areas that are not your main focus. Imagine your budget is over $150.
When you look at the budget, it appears you’ve allocated $200 for a cocktail party for the rest of the family. If I reduced it to a small afternoon party containing a punch and cookie it would probably take around 50 dollars a day.
Do not panic if your list of holiday costs looks too long. Is it possible to cover all these things for an inexpensive rate? Make a list by numbering the items you want in order of their importance. Assign “1” as the priority number, and priority number 2 as the priority number.
Make your lists more efficient by adding items of priority first. These items must be financed before you start making a holiday plan.
Focus on crafts, homemade gifts, donations, or experiences instead of store-bought items
You may need some other gift items to help save money for your next shopping trip and can easily find a better alternative on a smaller budget. There is an endless choice! Make candles and jewelry yourself or provide some time to clean the house and serve a meal or help someone learn new skills. These gifts are often even more appreciated and memorable compared to store-purchased gifts.
Set a spending limit
When you are looking at your budget you must decide how much you want. The best option would be to use your own funds to pay for re-investments, so there is nothing to worry about. First, take note of what you already saved in advance for the holidays.
Maybe your savings are stored all year round for the holidays in a Christmas club jar in the bank. If you plan well in advance you can start creating a nest egg that will help with planning.
Now we’ve got to learn how to spend money. Check your list and calculate your spending on each item. Try not to make the calculations unrealistic. If you have 30 gifts, you could spend $100 on gifts for the whole family. Another point is that you can’t overspend on estimating. Looking at the bills from the last year will give you more insight into what the item is worth.
That means you don’t really need much money. You have to monitor what you spend during your shopping for your budget. In the case of buying clothes at different stores, you will be able to save on every purchase you make without sacrificing the rest of your budget. Setting up separate bank accounts for your holidays helps you stay within your budget.
Once you know where to spend, you can decide what to invest in. Make a list of what you will purchase. After making that list, review it two more times and make sure you don’t forget any costs. Whenever possible add another section to your budget labeled “other” for unexpected expenditures during the holidays.
How can I stay within my budget?
It’s not that difficult to plan your holidays. When there are so many gift choices to choose from during the holidays it is often difficult to keep them within the limits you set for yourself. Suddenly you stop arguing and you pull out credit cards. Depending on the holiday season, it helps you save more on everything from presents to entertainment for your loved ones.
A good method for saving Christmas presents can include restricting expectations – both for yourself and others – as to whether you have enough to offer to each person to buy.
If your expectations have been changed by someone, contact them directly and ask them about it first. Explain that you are on a tight budget that needs fewer presents / fewer gifts than you have done before. These conversations can be awkward, but most of the people around you will welcome them.
If you can no longer narrow the gift list, you’ll be able to buy a lot of things strategically to increase their value. You can also make a Black Friday or Cyber Monday sale, but beware that there isn’t always something to buy. Use Price Compare apps for shopping at a great price with ShopSavvy.
When you get at the cash counter, use your cash-back credit or rewards credit card to get more discounts during the holidays. It’s also easier to compare rates or apply coupons to make savings.
Hiring a professional caterer for a holiday event can be costly and having all your meals on hand will take time and effort. Make a potluck an ideal choice. Those who bring a single dish will get the chance to taste a variety of foods and will assume much more work and costs.
Among the dangers is if guests decide what foods they should bring they could end up putting out a whole platter of cookies and no main dish. This is avoided when the guests receive their own special dish and the guests have fewer options.
Do it yourself
Some holidays aren’t always available at a supermarket. Often the easiest way to make your own.
4 common holiday expenses and ways to save
Every holiday season, Deloitte conducts an online retail survey that tracks how consumers spend and budget their holidays.
Entertaining at home
Providing holiday parties, cookie decorating parties, and holidays to the household will help you quickly add more food and drinks, various gifts, and little extras that will add sparkle to your celebration.
This will be different due to the COV19 issue. You can enjoy holiday meals with family members who live within your home, or you can even share videos with extended family members.
Many travelers travel for their holidays for the sake of the family and some have a break from home. The report also noted the number has decreased in recent months by nearly 34% due to the pandemic but some people still opt for flying or driving during holidays to visit their parents.
Gifts may be bought for family or friends. The final price varies according to which gifts you are going to buy. Some people even give gifts to colleagues or others.
These expenses can include decorations for the holidays, greeting cards, flower arrangements, movie tickets, or any other expenses that may be common during your celebrations.
Create a Holiday Budgeting Plan
The holidays are a time for family, friends, and, of course, spending. From gifts and travel to food and decorations, the costs of the holidays can add up quickly. But with a little planning, you can stay within your budget and enjoy all the holiday cheer.
Start by evaluating your holiday spending habits. How much do you typically spend on gifts, travel, and decorations? Once you have a good idea of your typical holiday expenses, you can start to plan your budget.
Next, set some financial goals for the holidays. Perhaps you want to stick to a specific gift-giving budget or save money on travel. Whatever your goals may be, make sure they are realistic and attainable.
Now it’s time to start shopping. When buying gifts, take advantage of sales and special offers. And if you’re traveling, consider booking your trip well in advance to get the best deals on flights and accommodations.
Finally, don’t forget about the little things that can add up, like holiday cards and postage or Christmas tree lights.
Set a holiday spending limit
Setting a budget limit for holiday spending is crucial to keeping your budget low. Make sure that you don’t get money from the emergency fund or from the budget if you are going through necessary expenses like rent or electricity.
Identify your priorities
Do you have holiday budgets that are not within your budget? Make sure your list is checked for additional expenses. Fix budgets by prioritizing expenditures and delete any items which are not indispensable or could go into the hands of someone else.
Determine your holiday expenses
Calculate holiday expenses by keeping in mind what the holiday period involves. Ensure the expense is as low as possible.
Buy ahead of time
Plan your vacation. Because prices tend to rise during the Christmas season, be prepared to look at gifts before the holiday and get them at discounted pricing. Furthermore, now is an excellent time to see price trends and to be certain that we are getting our best deals.
Shop older versions
Often, people want the most recent gadgets, and the most advanced versions of these devices may actually provide better value. Compare models ahead of time to buy older versions if possible, particularly in gift-giving of technology gadgets.
Look for Discounts
When shopping for gifts try to use any possible means to make the most savings. You may install extensions for your browser, search online coupons and store brochures, or subscribe to email lists of merchant offers to signup.
Create DIY gifts
You’ll probably make a better decision if you focus your gifts on thoughtfulness instead of lavish and showy gifts. Keep an eye out for your holidays and spend a lot of effort creating presents yourself.
With holiday budgeting hacks, you can save money and stay on top of your finances. For starters, set up a dedicated holiday savings bank account for holiday savings. This will help you keep track of your spending and ensure that you don’t overspend. it’s important to be mindful of your budget and avoid overspending.
One way to do this is to set aside money in a savings account to purchase gifts. This way, you can avoid dipping into other areas of your personal finances and accruing debt. Another tip is to start your holiday shopping early in order to take advantage of sales and discounts
While it can be difficult to stay on budget during the holidays, following these tips can help make the season more enjoyable while keeping your finances in check. Have you tried any of these techniques? What has worked best for you in the past holiday seasons? Let us know in the comments!
Chris Ekai is a Certified Public Accountant(CPA) and has a Bachelor of Commerce Finance. His writing interests include personal finance, budgeting and debt. Chris provides expert advice on how to manage money and stay out of debt. He offers tips and tricks for living a financially healthy life.