This upcoming festive season, American shoppers are anticipated to shell out $1,530 for gifts, travels, and entertainment, marking a 7% increase from 2022, as per PWC. As many as 40% of consumers are projected to spend more than they did the previous year.
Considering the current hike in living costs, holiday expenses can be quite taxing, emotionally and financially. Budgeting becomes challenging when your friends and family follow a different financial game plan for the holidays.
For those who revel in holiday cheer and aim to celebrate to the fullest without being reckless with money, here are seven strategies to set you up for financial triumph:
DEFINE YOUR HOLIDAY EXPENSES
Prior to initiating your holiday shopping, formulate a rigid budget that’s within your means. Scrutinize your finances and arrive at an amount that won’t strain your wallet.
Money dedicated to gifts should be separate from the funds allocated for bills. If you wish to have a little extra spending money, ensure it’s not at the cost of your vital expenses like rent.
PLAN YOUR GIFT LIST EARLY
Excess spending is often the side effect of holiday euphoria. Hence, it’s crucial to plan a budget and stick to it. Document the names of gift recipients and establish a spending limit for each.
Starting early gives you time to buy gifts spread over a period, easing the financial burden.
TAKE ADVANTAGE OF EARLY DISCOUNTS
Avoid waiting for traditional sale periods like Black Friday or Cyber Monday; retailers offer deals round the year. These bargains can bring down the prices of big-ticket items while also beating the holiday rush.
COMPARE PRICES FOR BEST OFFERS
Hunt for attractive deals, discounts, and promotional offers to make your shopping economical. Schedule your shopping around active sale periods and consider price comparison tools for better bargains. Remember to explore digital retailers as they might have better offers.
EXPLORE ALTERNATIVES TO EXPENSIVE GIFTS
Consider homemade gifts, experiences, or charitable donations as cost-effective options. Spending time with distant loved ones can be an invaluable gift. It’s inexpensive and conveys your genuine appreciation.
CREATE YOUR OWN DECOR AND GIFT WRAP
Americans spend around $3.2 billion every year on gift wraps, according to Hallmark’s research. Try out DIY approaches for décor and gift wraps, which can be fun and significantly cheaper alternatives.
EMBRACE SUSTAINABILITY
Cheap, low-quality items often culminate in waste and unnecessary expenditure. Opt for gifts needing less packaging and support recycling. Sustainable gifts like a re-usable grocery bag or a solar-powered charger would be unique and thoughtful. Remember, home-baked confections are guaranteed crowd-pleasers. Recycle extensively to minimize waste generation.
TO SUM UP
Establishing financial boundaries for the holiday season is a practical and accountable step in financial management. It ensures enjoyable holidays without burdening your finances, leading to a balanced financial lifestyle:
Frugal festivities prevent overspending as holiday expenditures typically escalate due to shopping for gifts, décor, travel, and entertainment. Clear financial limitations reduce financial anxiety and possible debts.
It also alleviates stress. Clear boundaries manage expectations, reduce worry, and promote relaxed merrymaking.
Post-holiday debt is mitigated as financial limits control extravagant spending, fighting off credit card debts, and consequent interest charges. Impulsive spending and regrettable purchases can compromise your financial objectives.
