According to a Gallup poll, Americans plan to spend an average of $752 on gifts this holiday season. Whether that number reflects the amount you’re going to spend or not, it’s important to stay conscious about how much you spend during a season that’s easy to get swept up in. That doesn’t mean you should put the kibosh on presents entirely, but creating and sticking to a holiday budget will help ensure a truly happy New Year. With that in mind, here is some advice for those looking to spend their money wisely this holiday season.
1. Create a holiday budget
Sticking to a holiday budget requires you to first create one. Holiday spending money should come from your available disposable income. If you spend more than you have, prepare to pay the price with credit card bills (and interest) that could take months – even years – to square away.
Aside from the gifts themselves, there are a lot of financial variables that many people don’t account for in their holiday budget, such as gas, postage, travel expenses, charitable contributions, etc. All of these expenses should be accounted for to ensure maximum control of your finances.
2. Stick to your holiday budget
It’s important that once you create your holiday budget, you stick to it. Make a gift list that includes all family and friends you plan to shop for. At the top of the list, write the total gift budget. Next to each name, write the amount you plan to spend on them. Do this until the budget at the top is completely allotted, and cross off the name after each purchase to prevent the mistake of buying gifts for the same person twice.
3. Pay with cash
According to experts, cash makes it easier for you to stick to your budget. This is because it’s a tangible asset you can touch, feel and keep track of easily, unlike its intangible credit card counterpart. When you’re ready to do your holiday shopping, get labeled envelopes with the names of people you’re buying gifts for, and put the appropriate amount of cash in each one until you’ve reached your budget. This will ensure you’re not spending more than you can afford.
4. Keep your emotions in check
When buying holiday presents, it’s common to mix emotion and spending when you’re not actively recognizing it. You should never feel guilty about what you can’t afford, or be tempted to overspend. If those feelings arise, remind yourself why you are holiday shopping on a budget in the first place. Additionally, less time in a store means fewer purchases. Try shopping with a reliable friend who can move you along the store and help you resist the urge to impulse spend.
Do you have tips for sticking to a holiday budget? Share your ideas with our readers in the comments below!