With Christmas around the corner, you and your family are probably looking forward to delicious baked goods, thoughtful gifts and quality time with each other. However, holiday cheer is often accompanied by excessive spending. Most of us tend to go overboard in the festive spirit and trying to create happy memories. Instead of letting holidays put you in a financial crunch, it’s time to reconsider your spending habits. Here are some ways you can avoid overspending this Christmas season.
Create a Budget
Just hoping you won’t spend too much isn’t enough. It’s important to list down all your potential expenses and accordingly create a budget. This budget will be your spending guide for the upcoming months. Try your best not to stray from it. For example, set a dollar amount for how much you are going to spend on each person’s present, on new decorations for this year, on eating out, etc.
I also hold my kids to this budget. They each like to buy their siblings presents, but five kids buying presents for each other can add up quickly (since it’s really coming out of my wallet and not theirs). My rule is that they can spend $5 on each other, which lets them get each other a small present without breaking my bank account. It can be hard to stick to this when they find an adorable $8 present that their sister would love, but it’s important to help them learn to budget and spend wisely as well.
Cut Back Spending Year-Round
You already know that you will be spending more than usual during the holiday season. Why not make necessary adjustments year-round? We recommend finding ways to cut back your spending at least a few months before the holidays. Doing this will allow you to expand your budget and avoid financial strain. Some expenses you can avoid are artisanal coffee, dining out, clothes and OTT subscriptions.
Another idea is to add a line to your budget every month for birthday and Christmas gifts. In months when there are no birthdays, that money can accumulate towards Christmas presents. Budget expert Jessi Fearon calls this a “Christmas sinking fund.”
Look Beyond Obvious Expenses
Gifts, decorations and alcohol are a few common holiday expenses. But there are some not so obvious expenses that tend to increase during the holiday seasons. In particular, you can expect your energy bills to rise. Considering that you’ll probably decorate your home with additional lights and use kitchen appliances more than usual, it’s a good time to switch to a competitively priced plan. Head over to Electricity Wizard to find a suitable plan for your home. Try to remember to turn off the Christmas lights when everyone goes to bed or leaves the house.
Gifts aren’t the only thing that will drive up your spending around holidays. Apart from that, you also have to think about decorations, cooking ingredients, alcohol and other expenses. Make sure you are taking into account all the expenses you will likely incur. We suggest purchasing cooking and baking ingredients in bulk to take advantage of discounted prices.
Don’t Shop Last Minute
We know that holiday shopping, especially buying gifts, can be extremely overwhelming. But that doesn’t mean you should delay it to the last minute. Not only will you be left with limited options, but you may also end up making impulse purchases. Give yourself sufficient time to compare various options and purchase gifts at reasonable prices.
Hunt for Deals
Thanks to the internet, you have access to an extensive range of products without leaving your home. Rather than buying full-priced items, it would be best to look for deals and discounts. Typically, you can buy products at great prices during Black Friday and Cyber Monday.
Consider DIY Decor & Gifts
There is no obligation to purchase the most extravagant gifts for your loved ones. Why go through all the trouble when you can make thoughtful presents at home? From exquisitely scented candles to resin trinket dishes, there are plenty of DIY gifting ideas available. While making gifts at home may take up more time, it’s a wonderful and affordable way to make your loved ones feel special. My teenager has spent the last several months busily crocheting gifts for her friends and family.
Plan Gift-Exchange Games
Buying gifts for all your friends and family can become quite expensive as well as stressful. So what’s the alternative? Well, you can’t cut too many people off your list. But you can consider planning gift exchange games such as Secret Santa or White Elephant. This way you’ll only have to buy a couple of presents.
My extended family has done a White Elephant exchange for many years. Each person buys one present for a certain budget. On Christmas, we each draw a card. The person with the one goes first, picking a present from the pile. The person with the 2 goes next and can either steal the first person’s present or take a new present. There is usually a lot of fun and hilarity around this, as a certain present each year will end up being the “hot item” that gets stolen frequently. Of course, we all know each other very well so it’s easy to get presents that several people will like and be happy to receive.
The Bottom Line
Don’t let this joyous occasion turn sour by draining your savings. Hopefully, the aforementioned tips will help you save more this holiday season. After all, you don’t have to spend a fortune to have a good time!
How do you avoid overspending during the holiday season?