The holidays are a joyous occasion to spend time with your family and friends. However, the holidays can break the bank if you do not plan in advanced.
1. Create a Budget
Before the holiday season begins, review your household budget and determine how much you can spend without going into debt. You want to make sure you can live after the holiday season! Determine the amount of money you can spend on gifts, parties, and decorations without breaking the bank. Being realistic with yourself about your budget will make the holidays so much easier to maneuver. Once your budget is created, make sure you that you stick to it.
The money that you spend on gifts SHOULD NOT be your monthly household expenses. Your family should be in good shape financially after the holidays are over.
2. Build Up Your Savings
Many of my friends laugh at me because, I have “The Sommer Savings Plan” for everything. Holiday spending is no different. Having a plan on how you want to finance your holiday spending is the best thing that you could ever do. If you start in January and put away $100.00 a month which is only $50.00 a paycheck, you will have $1100.00 by December. The small amount that you saved throughout the year will help you have a stress free holiday.
Online banks are great to use such as, capital one 360 or Barclay in order to save your money throughout the year. I have my money taken out of my bank account every two weeks and I do not even miss it. Once you need the money just logon to your account and transfer the money back into your main bank account and you will be ready to have a stress free holiday spending season.
3. Reduce Expenses
If you need additional money for the holidays look at reducing some of your unnecessary spending. For example, I like to have a Tim Hortons Coffee everyday with a bagel. That is approximately $4.00 a day five days a week. That is $80.00 a month I could save by not going to Tim Hortons every morning. That is $80.00 a month I could use towards my holiday spending.
Take a look at your bank account and credit card bills. Is there anything you spend a lot of money on that you could cut out for a couple of months? Giving up my daily Tim Hortons or eating out less could make a big difference in increasing my holiday budget.
BE REALISTIC about what you are willing to sacrifice in order to increase your holiday budget. If I gave up my monthly Tim Hortons run however, purchased a new outfit to go to a work party which was more than my daily coffee did not reduce my expenses.
4. Make a Gift List
Write down a list of all of the people you want to purchase a gift for this holiday season. After you figure out who you want to buy for, then you need to determine how much you want to spend on each individual. Of course, this process should be done after you determine your budget for the holiday season. Shopping without a plan can lead to financial disaster. Going in with a plan will assist you with staying within your budget. Your shopping list does not have to include EVERYONE that you ever met in life. DIY gifts and sentimental gifts can be very affordable. Many times people are just honored that you thought enough of them during the holidays to purchase them a gift.
5. Track Your Spending
Lastly, track your spending. Start a list or spreadsheet to make yourself ACCOUNTABLE to the amount of money that you are spending. Write down every gift, new holiday outfit, decorations, and holiday travel expenses so you can easily track how much you’re spending vs. how much you have left in your holiday budget. This will be helpful for you when planning for the holidays for upcoming years.