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Excessive holiday spending can lead to financial mistakes that can haunt you from Halloween to New Year’s Eve and beyond. Money worries can sneak up on you during the holiday season because money mistakes are so easy to make. Proper holiday budgeting can prepare you for the new year by keeping you out of debt.
This holiday season, do more than passively monitor your spending. Plan for all of your expenses, and not just gifts.
‘Tis the Season For Happy Holiday Budgeting
Putting together a budget by the month makes sense. So why would your first step preparing for the holiday not include setting a spending limit for the holiday season? Whether you’re hosting or traveling to a loved one’s home, it is important to establish how much you plan to spend before the holidays begin. By setting a budget, you will be better equipped to control the amount you spend. This is essential to avoiding overspending during the holiday season. With a solid budget in hand, you will make better choices about everything from gifts to holiday entertainment.
It’s true that holiday budgets are tough to stick to—especially for parents of young children. According to CNBC, nearly 80% of shoppers overspend during the holiday season by $215. It’s easy to want to spoil the people in your life with everything they’ve asked for. Too often, American feel pressured to spend more than they can afford during the holiday season.
Whether you’re hosting your family this year or traveling home—to avoid overspending, consider your major expenses and set an appropriate holiday budget:
- Gift giving
- Food and drinks
What Steps Can I Take to Stick to My Holiday Budget?
Most Americans set then exceed their holiday budget. A 2017 survey found that 65% of U.S. adults set a holiday budget. On the downside, 77% of those who set a budget will overspend. You can avoid the spending holiday hangover by:
After you’ve set your budget for each category, you will need to make a list of the people in your life for which you will be buying gifts. It’s easy to set and stick to a budget for areas such as traveling, food, and entertainment. However, gifts are a major area where people tend to overspend. Before you turn on the computer or hit the stores, make a list of the people you plan to shop for. You can get a clear idea of how much you will spend and be aware of how many gifts you need to purchase.
Fight Impulsive Urges to Spend More
You spot an item in the store and think to yourself, “Cousin Bert would really love this!” But Cousin Bert isn’t on your list to buy for, nor is this gift in the budget you set for yourself. If you must get Bert this gift, add him to your holiday budget and adjust the amounts you plan to spend per person accordingly. Your goal is to keep the same total budget.
Plan for other expenses
In addition to your big-ticket items, plan for the little things this season. Take an inventory of how much wrapping paper you have left over from last year’s last-minute trips to buy wrapping paper. The little things add up and are just as capable of putting a dent in your pocket as the big-ticket items. Consider how much you’ll spend on:
- Postage for sending cards
- Shipping costs
- Wrapping paper
- Greeting cards
- Holiday outfits (Christmas parties, New Year’s Eve parties)
In addition, it’s a good idea to plan for which charities you’ll be donating to. For example, if you give to toy drives and other drives during the holiday season then it’s a good idea to include this in your holiday budget.
Even if you are a late shopper, there are still plenty of deals available. With a list of people to shop for you can look in stores and online for the best deals on items you’re looking to get loved ones.
Keep a Running Total of How Much You’ve Spent
Keep receipts or write down the totals of online purchases to keep track of how much you’ve spent. By keeping track of how much you’ve spent, you will provide yourself with a constant dose of reality of how much you can afford to spend.
Avoiding Credit Card Use
Sounds cliche, but this is a biggie. By avoiding credit card use on holiday purchases, you can avoid paying on the purchases year round. If you are unable to avoid using a credit card when shopping take only the credit card you will use for the purchase.
Use this Budget Formula to Monitor Your Spending!
The Carlson Law Firm Can Help
Holiday budgeting is difficult, however, financial difficulties can put a strain on the holiday season. If you find yourself being harassed by creditors or facing foreclosure, repossessions, lawsuits or tax problems, it may be time to seek professional guidance from an award-winning bankruptcy attorney. Our firm can help you find the debt relief you are looking for. We recognize that every debt situation is unique and will take the time to get to know you and understand your case. Our knowledgeable and experienced personal bankruptcy attorneys are committed to giving the best legal guidance to our clients.
Contact us to schedule a free consultation with one of our compassionate Texas Bankruptcy Attorneys. If you are in Central Texas, we can assist you with Chapter 7 bankruptcy.