PWC anticipates American consumers will be shelling out 7% more compared to last year in the upcoming holiday season, with expenditures reaching around $1,530 per person for gifts, travel, and entertainment. This expectation means that 40% of consumers are projected to increase their spending compared to last year.
Given the rising costs of goods and services, holiday expenditures can take a toll on people’s wallets and emotions. Developing a holiday budget can be a daunting task, particularly when friends and family members may not share your financial discipline. Nevertheless, if you are enthusiastic about the holidays, here is a plan to enjoy it without getting into financial problems. Here are seven rules to set now to maximize your financial capabilities for the holidays.
1. **DECIDE ON HOLIDAY EXPENDITURES**
Determine how much you can allocate for holiday expenses before you begin shopping. Scrutinize your financial status and establish a budget within your means. Ensure the money earmarked for gift-giving does not interfere with regular bills. If you wish to spend more, you could set aside cash that doesn’t cut into your monthly rent, ensuring you remain financially balanced.
2. **DEVISE A LIST AND COMMIT TO IT**
To avoid overspending, adhering to a prearranged budget is crucial, especially during the holiday season when gift buying is rampant. List out your main gift recipients and the corresponding amount you intend to spend on each. By preparing your list early, you can start buying presents gradually; this approach avoids a major dent being made in your wallet later.
3. **TAKE ADVANTAGE OF EARLY SALES**
Don’t wait for traditional sales events like Black Friday and Cyber Monday. Top sellers often slash prices well before these sales. Shopping during off-peak times can bring you closer to your desired items at affordable prices and allow you to avoid the rush that comes later in the holiday season.
4. **COMPARE PRICES FOR THE BEST BARGAIN**
To get the most value out of your holiday purchases, keep an eye out for sales, discounts, and promotions. Align your shopping with sales events and utilize apps or websites that compare prices. Make sure to research prices as some online retailers may offer better deals.
5. **CONSIDER OUT-OF-THE-BOX GIFT ALTERNATIVES**
Opt for more affordable alternatives such as handmade presents, experiences, or charitable donations instead of pricy gifts. Giving the gift of time can have significant meaning, especially for distant loved ones who might cherish a visit from you.
6. **CREATE YOUR OWN HOLIDAY DECORATIONS AND WRAPPING**
Americans annually spend approximately $3.2 billion on gift wrappers, according to Hallmark’s research. Save money by making your own decorations and gift wrappers. It can turn into a joyful festive activity, and you can save money compared to purchasing expensive materials.
7. **EMBRACE RECYCLE, REDUCE, AND REUSE**
Opt for gifts that are durable and environmentally friendly to reduce waste and expenses. Consider gifts with less packing or ones that help the environment like a stainless steel water bottle, reusable grocery bag, solar-powered phone charger, or toys made from recycled material. Remember that homemade edibles can be delightful gifts too. Try to recycle packaging material whenever possible.
**CONCLUSION**
Setting up financial boundaries for the holiday season is a proactive way to manage your finances. This approach lets you enjoy the festivities while ensuring your financial health and fostering a positive and sustainable relationship with money. By doing so, you can avoid the pitfalls of overspending during the holidays, reduce financial stress and post-holiday debt, and avoid impulsive purchases, promoting progress towards your long-term financial objectives.
