Blog

It’s easy to get caught up in the magic of holiday spending. But if you’re relying on credit to make holiday wishes a reality, the magic often falls flat when your bills come due. Take the time now to create a holiday budget and avoid post-holiday spending regret.

Be Realistic

The best thing you can do to curb your holiday spending is to set a realistic but firm budget.

To create a holiday budget, start by looking at what you spent last year. Consider the impact that spending had on your budget—for instance, were you paying off credit card bills for months after the holidays? Did you have to skip the family summer vacation because Christmas was too expensive?

Be honest about the trade-offs that you’re making with your current holiday spending. That will strengthen your resolve to stick with a budget this year. Click here to create a holiday budget.

Evaluate Individual Expenses

As you create a budget, look at each individual expense. Try to be as comprehensive as possible. Think about:

• Gifts for immediate family
• Gifts for extended family
• Gifts for friends, neighbors, and coworkers
• Travel expenses like gas, flights, and hotels
• Food and party supplies
• Christmas cards
• Postage and shipping
• Gift wrap supplies

Add up what you plan to spend and determine whether or not that spending fits inside your budget.

Adjust Expectations

Choosing an appropriate budget may mean you need to celebrate in a different way than in years past. If this is true, have an open conversation with loved ones and let them know you need to opt out of traditional gift exchanges.

Or arrange with family to do gifts of time and service instead of physical gifts. This isn’t as exciting for younger family members, but older ones may appreciate help with decluttering or organizing spaces in their home, sifting through family photos, or another project.

Spending money on someone or something in the past doesn’t mean you must spend the same amount forever, especially if you have to go into debt to do so.

Make a List and Check It Twice

Getting organized with your gift giving can help you take advantage of holiday sales and get the best prices on items. Keep track of your gift list and spending (there are apps for this!).

You can also try an app to find the best price on popular items. Or, check prices between a few of your favorite online shopping sites. A few minutes searching can save you lots of money.

Cash Out Rewards

If you use a credit card with rewards points or cash back, the holidays are a great time to put those perks to good use.

This feels like “free money” you can use to purchase gifts, pay for travel, and more. Your card may even offer additional rewards or cash-back bonuses for spending at certain stores or categories. If this aligns with purchases you’re already planning to make, why not take advantage of it?

Plan for Next Year

If you’re tired of feeling the holiday pinch, start saving for the next holiday season now.

Open a Holiday Savings Club and break your targeted budget into doable chunks. Whether that’s a daily, weekly, or monthly contribution. Finding $25 or $50 in your monthly budget is a lot easier than trying to find $600 or more when the holidays roll around next year. By starting early, you’ll be doing your future self a favor.

Reference:

https://fairmontfcu.banzai.org/wellness/resources/create-a-holiday-budget