The upcoming festive season is projected to see American consumers spending $1,530 on gifts, travel, and entertainment; a 7 percent increase from the previous year, according to PWC. An anticipated 40 percent of consumers are believed to be preparing to outdo their previous year’s spending.
The holiday period, while enjoyable, can potentially create financial and emotional strain due to soaring costs of almost everything. Planning for the holiday budget can be a daunting undertaking, more so if your circle of friends and family members do not share your fiscal approach to holiday expenses.
If just like me, you buoyantly look forward to the holiday season and aim to maximize your enjoyment without straining your finances, then the following seven guidelines might prove helpful in achieving a financially sound holiday.
1. DEFINE YOUR HOLIDAY BUDGET: Prior to plunging into holiday shopping, establish your budget. Review your financial circumstances to ascertain an affordable spending limit. Your gift budget should be free from monthly bills. However, if you have extra cash to spare (not at the expense of your rent), feel free to enhance your funding.
2. DRAW UP AND STICK TO A GIFT LIST: Holiday shopping can cause one to exceed their budget easily. To avoid this, jot down a list of individuals you plan to gift and assign spending limits per person. The earlier you compile this list the better, as it also allows for spaced-out purchases, reducing financial strain.
3. CAPITALIZE ON EARLY SALES: Don’t wait till traditional seasonal sales like Black Friday or Cyber Monday. Retail outlets are dotted with enticing deals throughout the year. Early-season sales often offer discounted prices on high-priced items. This approach allows you to shop ahead of time, before the holiday shopping frenzy kicks in.
4. COMPARE DEALS: Search for the best deals on your holiday shopping. Utilize applications or websites that compare prices and work around sales events. Retailers usually offer their best deals from Black Friday until Cyber Monday. Always research prices and consider online stores that might have superior deals.
5. EXPLORE NON-TRADITIONAL GIFT OPTIONS: Economical alternatives to pricey gifts could be homemade gifts, experiences, or charitable donations. Visiting distant relatives in person is also an effective way of exhibiting appreciation without spending excessively.
6. DIY DECORATIONS AND WRAPPING: Americans spend roughly $3.2 billion annually on gift wrap alone, Hallmark research reveals. You can save costs by personally crafting decorations and wrapping papers.
7. BE ECO-FRIENDLY: Inferior products tend to wear and tear rapidly, wasting resources and costing you money. Aim for eco-conscious gifts like stainless steel water bottles, renewable grocery bags, solar-powered phone chargers, or toys made of recycled material.
The Bottom Line:
Prudent financial planning for the holidays allows for a joyous season without compromising your fiscal integrity. It’s a sustainability practice that minimizes overspending, which can often result from increased costs during the festive season. By doing so, you manage holiday stress levels, and avoid potential financial repercussions such as incurring credit card debt that takes months to pay off – hence, preventing any impediments to achieving other financial goals.
