This festive season, American consumers are projected to spend an average of $1,530 on gifts, travel and entertainment, marking a 7% increase from 2022, as per PWC. Approximately 40% are anticipated to spend more than last year. Given the rising costs of virtually everything, holidays can take a toll on one’s emotions and wallet alike. Budgeting during this period can be tough, particularly if your loved ones don’t share your perspective on holiday finances and expenditures.
But if you share my love for the holidays and are looking to get the most out of them without letting it impact your bank balance significantly, then continue reading. I will guide you through seven measures you can implement immediately to chart your path to financial success this festive season.
SET HOLIDAY SPENDING LIMITS
Prior to commencing your holiday shopping, devise a stringent budget defining your maximum expenditure. Thoroughly assess your finances to ensure it’s an amount you can effortlessly handle. The funds you spend on gifts should ideally not detract from what you allocate towards bills. However, in case you wish to have a slightly bigger budget, your leftover cash can be applied here—as long as it doesn’t conflict with your essential expenses like rent.
MAKING AND STICKING TO A LIST
The holiday spirit can often entice you into spending more. Hence, initial budgeting is crucial. Device a list of the main recipients of your gifts, and stipulate how much you intend to bestow each person. The sooner you prepare this list, the earlier you can commence your shopping, ensuring your purse strings aren’t strained later.
SHOP THE EARLY SALES
Don’t limit yourself to standard seasonal sales typically associated with Black Friday, Small Business Saturday, and Cyber Monday. Prominent retail outlets host sales and deals year-round. These early-bird sales often enable you to purchase coveted bigger-ticket items at affordable prices and stay ahead of the holiday hustle.
LOOK AROUND FOR THE BEST DEALS
You can optimize your holiday purchases via active pursuit of sales, discounts, and promotions. Plan your purchases during specific sales events and leverage price comparison apps or sites. Retailers are known for hosting their biggest discounts in the period between Black Friday and Cyber Monday. Take the time to examine pricing across platforms and look out for better offers online.
EXPLORE NON-TRADITIONAL GIFT ALTERNATIVES
Costly gifts are not the only option. You could explore creative alternatives like homemade gifts, experiences or charity donations. A personal visit, for instance, could prove a priceless gift for those living at a distance. This approach assists in conveying your affection without taxing your bank account.
DIY DECORATIONS AND WRAPPING MATERIAL
Purchasing gift wrapping could significantly dent your wallet. As per a study by Hallmark, Americans expend approximately $3.2 billion annually on gift wrapping. Instead, delve into DIY for creating your very own decorations and wrapping material. It’s not only a pocket-friendly and fun-filled festive endeavor, but it also saves you from shelling out on expensive decor and wrapping paper.
DOWNCYCLE, REPURPOSE, RECYCLE
Inexpensive, less durable items tend to wear out speedily, thereby causing waste and bleeding money. Opt for gifts that are minimally packaged, for instance, gift certificates or concert tickets. Send recycled-content greeting cards to cut down on the use of new paper during the holidays. Select gifts with a consideration for the environment, like a solar-powered charger, reusable grocery bags or toys made of recycled material. Don’t forget, homemade treats never fail to make an impression. Always recycle where possible, be it large cardboard boxes, gift boxes, Christmas trees, electronics and the usual recyclables.
THE TAKEAWAY
Imposing fiscal restrictions during the holiday season is a proactive, sensible way to handle your finances. This allows you to relish the festival vibrancy without endangering your financial stability, thereby nurturing a healthier and sustainable bond with money.
This approach safeguards you from overspending since the holiday season usually incurs various additional expenses like gifts, decorations, travel and entertainment. Lack of determined financial boundaries raises the risk of overspending which could result in financial anxiety and potential debt.
It further reduces financial stress, a frequent concern during and post the holiday festivity. Clear boundaries aid in managing expectations, diminish stress levels, and allow for a carefree enjoyment of the season without perpetually worrying about expenditure.
It also helps to curb Post-Holiday Debt syndrome. Excessive spending during the holidays can lead to considerable credit card debt which could take months to repay. Imposing financial boundaries aids in avoiding debt accumulation and related interest charges.
A lack of financial boundaries increases the chances of impromptive and regrettable purchases, potentially derailing progress towards other financial objectives.
