‘Tis the season to start trimming – your budget, that is,
and not just your tree.
A November 2013 Gallup poll found that while the
average American originally expected to spend around $786 on the holidays back
in October, that number is now down to $704. While it’s true that the general
public might have a little less to spend, that reduction is also indicative of
the changing mindset of spending as a whole. Consumers with big eyes are now
wary of a volatile market and, consequently, of putting too much of the holiday
season on plastic. This means more restricted budgets.
By saving and spending wisely, your holiday season doesn’t
have to be a total budget-buster. Follow the lead of the average American
and try trimming your expenditures without sacrificing any of the holiday
experience.
Spending and Saving During the Holidays
Before you hit the mall or organize a big party, it can help
to have a comprehensive plan in place so you know exactly where your money is
going this holiday season – that way, you can ring in the new
year with celebration rather than panic. Here are several ways to keep
your spending under control this December.
1. Make a Budget
There are a couple different ways to set a holiday budget.
You might want to establish a general spending cap, or try allocating a
specific amount to each person on your gift list. Be aware, though, that while
making a holiday budget is great, it can go sour in one of two ways:
Setting a Budget That’s Too Tight. While setting a tight
budget always starts with good intentions, an unrealistic one can do more harm
than good. Without a little wiggle room for last-minute purchases or enough
cash allocated for your mom’s gift, you can end up very frustrated. In fact,
you might get so frustrated that you just toss your budget out the window. To
prevent this from happening, look over your numbers. Do you really need to
spend $50 on wine, or can you cut back in order to allocate more money to gifts
instead? Don’t just pick numbers out of thin air – really think things over to
ensure that you make the right decisions.
Forgetting the Little Things. Gift giving is a huge expense
during the holidays, but don’t forget the other costs you incur throughout the
season. Parties, travel expenses, charitable
donations, and holiday-themed activities can all add up to destroy a
budget. If possible, add some money into your budget for unexpected costs so
you’re not left scratching your head.
The way you create your budget is up to you, but one thing’s
for sure: you need one. Create yours before the season hits full steam, and
revisit it often to make sure you’re spending within your means.
2. Track Your Spending
Your budget does no good if you don’t effectively track your
spending. Personally, I keep a separate Christmas fund in a dedicated bank
account. This makes it easier for me to separate holiday spending from regular,
day-to-day expenses. I also have my bank’s app on my phone, which allows me to
check my balance and track my spending anytime, anywhere – even in line for the
cashier.
Spreadsheets are also an excellent and accurate way to track
your holiday expenditures. By establishing a budget and entering your real
expenses, you can easily keep yourself on track. Just be sure to remain
diligent. I find that if I can track my expenses in real-time, I’m much more
effective than if the receipts are lying around for days before I input them
into my system.
3. Cut Back on Extras
Getting lattes piled sky-high with whipped cream, splurging
on a pair of shoes for yourself, paying for a photo with Santa – we’re all
guilty of indulging a little more than we should simply because it’s the
holiday season. However, you can’t get stuck in a trap where constant spending
on “extras” eats into your budget.
Cutting back on those extras can have a big impact on your
bottom line. For example, if you purchase a $4.50 pumpkin spice latte three
times per week throughout December, that’s $162 you’ve spent on pricey drinks.
That money could have paid for a few Christmas gifts, enough gas to get to
Grandma’s house, or a generous donation to a charity of your choice. Before you
splurge on a little treat or “extra” for yourself, be sure it’s really worth
the price.
4. Use the “Secret Santa” Method
I have four brothers and one sister-in-law on my side of the
family, and three brothers-in-law and three sisters-in-law on my husband’s
side. Add in the 11 nieces and nephews, and buying for the family becomes a
huge expense – not to mention a major drain on my schedule. Instead of buying
for each member of the family or even pulling names out of a hat, we’ve decided
to funnel our resources into a Secret Santa experience instead.
Our local church decorates a tree with ornaments, each
decoration with the age, gender, and specific Christmas wish of a child in
need. Instead of buying presents for my own family members, we choose to
purchase gifts for the anonymous beneficiaries. The best part is that each
individual family chooses as many ornaments as they can afford – some can buy
for an entire family, while others can pick one or two ornaments to fit their
budget. In the past, my kids and I have had fun picking out toys, clothes, and
books for children of a similar age.
Not only does a Secret Santa experience help relieve some of
the stress and financial burden of exchanging gifts with every member of my
family, it gives us a chance to talk about the importance of service and giving
during the holidays. I love that my kids get a break from the “gimmes” and get
to focus on someone less fortunate.
Some other ideas for charity during the holidays include the
following:
- Toy drives
- Volunteer work
- Baking treats for neighbors
- Assembling care packages for shelters, hospitals, or the armed forces
- Coat drives
- Donating to charity
Funneling what you would have spent on family gifts to those
in need is a great way to give back, have a charitable experience with your
loved ones, and relieve
holiday stress.
5. Choose Cheaper Traditions
Traditions are what make the holidays so special, but they
can be a financial burden. If your traditions include holiday travel, paying for
a special attraction, or surprising your kids with extravagant gifts, you might
find yourself going significantly over budget in the name of family.
While traditions are important and admirable, they don’t
have to be expensive to be memorable. In fact, you might find that your kids
prefer the cheap stuff to the grander gestures. So many activities and
traditions are inexpensive, or even free – you just have to know where to look.
By making cheaper events and traditions part of your celebration, you can save
money without skimping on the festivities and memories.
Here are some of my favorite cheap activities:
- Touring neighborhood Christmas lights
- Watching a movie with hot chocolate at home
- Sledding
- Seeing Santa at the mall
- Making Christmas crafts
- Baking together
- Reading favorite Christmas stories
- Seeing a high school production, such as a play or choir performance
- Caroling
- Checking daily deals, such as those on Groupon or LivingSocial, for discounts on local attractions
Teach your kids that traditions aren’t about what you spend,
but the time you spend together.
6. Embrace Potluck
We host Christmas Eve for our extended family every year at
our home. I love prepping, cooking, and having everyone together for
Christmas – but you know what I don’t love? How expensive all the food,
decor, and activities always are. Buying food for 30 people is seriously
pricey, and if not for potluck assignments, I’d be spending most of my
Christmas budget on food and drink.
Now, I’ve learned my lesson – if you’re hosting an event,
embrace the idea of potluck
assignments. Let everyone know you’re going to make the main dish, but that
you’d appreciate help on sides, appetizers, desserts, and drinks. I simply send
out an email a few weeks in advance letting everyone know what their
assignments are to ensure we don’t end up with five vegetable trays and no
dessert.
I also assign Christmas
games and activities to some of my teen nieces and nephews. They love
being involved, and I don’t have to stress about keeping guests entertained.
7. Take Care Around Sales
Holiday sales can be an epic opportunity to save money – but
be careful. Not all deals are created equal, and some may not even be truly
discounted, as some stores keep prices the same but simply mark items with a
“sale” sign.
Always comparison shop before you purchase an item during a
sale. I use the ShopSavvy app – it allows me to scan the bar code of any item
and see prices at nearby stores and Internet retailers to make sure I’m getting
the best deal. Or, if you tend to fall victim to the festive atmosphere of a
store and make unwise purchases, try shopping solely online. You can snag great
deals and use coupon codes to get a lot more for your money.
Of course, you never save money by spending, no matter how
significant the discount. Sales are great, but they don’t mean much if the
money isn’t in your budget. If necessary, bring a printout of your budget so
you can check your spending in real-time and avoid being swayed by a screaming
deal.
8. Know When to Stop
When your list is finished and you’ve checked it twice, it’s
time to stop shopping. Know when you’re finished, and avoid stopping by the
mall “just to see what they have” – this can lead to making poorly planned
purchases and blowing your budget.
I typically get the itch to shop a few days before
Christmas, so I specifically save shopping for stocking stuffers until the last
minute. That way, I’m still operating within my budget and purchasing something
I actually need while fulfilling the urge to be part of the holiday hustle and
bustle. By planning purchases and stopping when you’re done, you can be spared
that holiday hangover come January.
9. Get a Head Start
The period right after the holidays is the perfect time to
check over your budget and make plans for the new year. How did you do? Did you
stay within budget? Were there places you could have cut back?
This is also the time to start planning a credit card
payoff strategy if you used plastic to finance your festivities. In a
perfect world, you wouldn’t have put anything on your credit card that you
couldn’t pay off in a month, but if you went overboard, commit to a payment
plan that eliminates your balances within the next three or four months.
If you’re really savvy and have the storage, the days
following Christmas are also ideal for getting a jump-start on purchasing decor
and wrapping goods for next year. Of course, that’s only if you’ve budgeted
accordingly.
Final Word
It’s all too easy to get caught up in the spending cycle
during the holidays. Marketing campaigns are geared toward making you open your
wallet in the spirit of Christmas, so it’s hard not to fall prey. However, if
you’ve got a plan in place and know how to stretch each holiday dollar, you
don’t have to fear your bank account statement on December 26th. Cheaper
entertainment, a focus on family, and a sensible spending plan put you firmly
in the driver’s seat of your own sleigh.
Do you have a holiday budget? How do you save money during
the Christmas season?
