PWC forecasts that American shoppers will shell out $1,530 for gifts, travel, and entertainment this holiday season, a 7% increase from 2022. Around 40% are projected to splurge more than the previous year. However, the escalating costs of practically everything can make the festive season emotionally and financially taxing, particularly when trying to budget. This gets even trickier when friends and family don’t share the same financial discipline around the holidays.
If you, like me, relish the holiday season and aim to enjoy it without straining your finances, consider these seven strategies to stay financially fit.
DEFINE YOUR HOLIDAY SPENDING CAP
Prior to embarking on your holiday shopping, draft a rigid budget to guide your expenditure. Analyze your finances to determine an amount you can spend comfortably. Ideally, it should be money left after settling all bills, but as long as you are not depleting your rent money, you’re on track.
CONSTRUCT A SHOPPING LIST AND ADHERE TO IT
When you’re immersed in the holiday ambiance, it’s easy to overspend. Having a budget helps, but you also need a specific shopping list. Detail the principal people you plan to gift and assign a spending allocation to each one. Starting this practice early not only lets you begin shopping well in advance, but also prevents uncomfortable surprises when your budget and list don’t align.
TAKE ADVANTAGE OF EARLY SALES
Avoid the rush to grab discounts on Black Friday, Small Business Saturday, and Cyber Monday. Most retailers offer deals throughout the year. Buying early can help you secure fabulous deals on coveted big-ticket items and stay ahead of the holiday pandemonium.
SCOUT FOR THE BEST DEAL
Always be on the lookout for discounts and promotional offers to get the most bang for your buck. Plan your shopping around sales events and resort to price-comparison apps or websites. While the period between Black Friday and Cyber Monday often sees tempting deals, don’t forget to compare with potential online offers.
THINK BEYOND TRADITIONAL GIFTS
In lieu of pricey gifts, consider homemade presents, experiences, or charitable contributions. Don’t underestimate the joy of gifting your time; visiting distant loved ones can be a profound show of love without draining your wallet.
GO DIY FOR DECORATIONS AND WRAPPING
Purchasing gift wrap alone can take a toll on your finances. Americans fork out approximately $3.2 billion each year on gift wrap, as per Hallmark research. Instead, create your own decorations and wrapping paper for a fun, festive, and frugal holiday.
EMBRACE THE THREE Rs
Cheap, short-lived items often lead to waste and expenses. Opt for gifts that require minimal packaging, like concert tickets or gift vouchers. Switch to greeting cards made from recycled content to minimize the use of fresh paper. Consider eco-friendly gifts, such as a stainless-steel bottle, a reusable shopping bag, a solar-powered phone charger, or toys made from recycled materials. Don’t forget the charm of homemade baked goodies, and ensure that everything recyclable is indeed recycled.
BOTTOM LINE
Establishing financial boundaries for the holiday season is a preventive and prudent strategy that allows you to appreciate the festivities without straining your financial health. This not only helps to prevent holiday overspending – a common pitfall given the larger expenses around gifts, decorations, travel, and entertainment – but also averts financial stress and the potential accumulation of debt. Plus, it curbs impulsive purchases that can obstruct other money-related aspirations. In the words of SmartAsset.com, setting clear boundaries around your holiday spending paves the way for a better and more sustainable relationship with your money.
