As the festive season approaches, even those who are normally careful with their finances might find themselves tempted to splurge on all sorts of social activities, potentially leading to a financial pinch. The allure of holiday cheer seems to incite extra expenditure among many Americans annually. For instance, the previous year saw such individuals planning to spend upwards of $800 on Christmas presents alone, which doesn’t account for other holiday-related expenses like greeting cards, Christmas trees, sumptuous dinners, and so forth.
It’s not entirely a matter of fiscal irresponsibility, of course; the spirit of Christmas tends to inspire additional generosity. Nobody enjoys being deemed a Scrooge, right? Nevertheless, if you’re striving to stick to a budget, the holiday season can spell catastrophe. Therefore, maintaining a balanced budget is essential. Here are five potentially destructive holiday spending traps and how you can sidestep them:
1. ENDLESS EXPANSION OF THE GIFT LIST:
You create your list, then revise it, then add more names…until eventually, the list has more than doubled. While the desire to shower everyone with gifts to express your appreciation is understandable, try to limit your gift-giving to essential individuals like close family and friends. Is participation in the office’s secret Santa exchange really necessary? Do you need more assorted nuts than you can possibly consume? Consider politely declining such obligations, citing budgetary constraints. Most people will likely understand.
2. OVER-THE-TOP GIFTS:
After shrinking your list, decide on a budget for each person and insist on sticking to it. A prepaid card with your gift budget preloaded can help prevent overspending. Teach your children the true meaning of the season by opting for shared experiences rather than material possessions, or participating in volunteer work as a family.
3. ACCEPTING EVERY PARTY INVITE:
While holiday parties brimming with good food, drink, and company are enticing, attending each one could stretch your budget thin. Factors such as hostess gifts, secret Santa exchanges, and even novelty Christmas sweaters quickly add up, creating a stealthy assault on your budget. Stick to your financial game plan by thoughtfully selecting which invitations to accept.
4. LAX MEAL PREPARATION:
Stress during the holiday season can lead to complacency, possibly resulting in an over-reliance on take-away meals. However, this relaxed attitude can wreak financial havoc, so schedule time to plan and prepare your meals. A well-stocked kitchen can help deter costly fast food cravings.
5. LAST-MINUTE SHOPPING:
Procrastinating on holiday shopping may seem tempting, but it’s a surefire way to end up paying full price due to time limitations. Start your shopping early; this allows ample time to compare prices and ensures you snag the best deals.
The festive season invariably puts strain on budgets, but with clever planning and avoidance of common pitfalls, you can still enjoy the holidays. How do you prevent typical holiday budget oversights? Have you prepared a plan for the challenges listed above? (Source: SmartAsset.com)
