The forecast for American holiday spending habits suggests an expenditure of $1,530 on gifts, travel, and entertainment, as per PWC. This indicates a 7 percent increase compared to 2022, with approximately 40 percent of consumers expected to exceed last year’s spending.
With almost all goods experiencing a rise in prices, the holiday period can be daunting, both emotionally and financially. Setting a budget and sticking to it, especially when friends and family may not share the same financial approach can be challenging.
If like me, you are passionate about the holidays and wish to maximize your enjoyment without depleting your finances, consider the following seven strategies for building financial stability in this festive season:
DEFINE YOUR HOLIDAY EXPENDITURE
Before the whirlwind of holiday shopping commences, take a moment to devise a firm budget, reflecting on your financial situation to decide on an affordable amount. The funds delegated to gifts should not encroach upon your bill money. If you wish to allocate more for spending, ensure it doesn’t interfere with necessities like rent.
MAKE A LIST AND MAINTAIN IT
Caught in the enthusiasm of the holiday season, it is easy to go overboard with spending. Therefore, chart out a list of main recipients and establish a spending limit for each. The beauty of this method is that once completed, you can begin your shopping and distribute your spending throughout the season.
KEEP AN EYE OUT FOR EARLY SALES
Frequent sales are offered by most popular retail outlets; it’s not just limited to traditional sale events such as Black Friday or Cyber Monday. Shopping in these early sales can save you money on larger items while helping you avoid the holiday rush.
HUNT FOR THE BEST PRICE
Sales, discounts, promotions – all are your allies in the quest for holiday savings. Planning your shopping sprees around sales events is beneficial. Several online apps or websites offer price comparisons to help you secure the best deal.
THINK OUTSIDE THE (GIFT) BOX
Spending exorbitant amounts on gifts isn’t a prerequisite for a memorable holiday. Homemade gifts, experiential gifts, and charitable donations are all meaningful alternatives. Similarly, the gift of your time can have immense value for loved ones who live further afield.
DO-IT-YOURSELF DECORATIONS AND WRAPPINGS
Store-bought gift wrap can dent your budget, considering Americans spend around $3.2 billion on it annually as per Hallmark’s research. Be creative and curate your own decorations and wrapping paper. It could be both an entertaining activity and cost-saving measure.
RECYCLE AND REUSE
Purchasing cheaper items often results in more waste and expense. Gifts requiring less packaging, reusable and recyclable items tend to be more sustainable and eco-friendly.
FINAL THOUGHTS
Establishing financial boundaries during the holiday season is an effective and prudent method of managing your money. It enables you to relish in the season’s joy without putting a strain on your financial health and promotes a healthier, more sustainable relationship with money. By doing so, it helps prevent overspending, reduce financial stress, and maintain post-holiday debt, reducing the risk of impulsive purchases. All of these contribute to an overall healthier financial lifestyle, as suggested by SmartAsset.com.
