The spirit of the holidays can be contagious, and many shopping experiences are designed to maximize your spending. But with a little planning and some pro tips, you can skate through this holiday season without breaking the bank. Start off the new year with a clean slate, not a mountain of credit card bills.
Here are our top 10 holiday budgeting tips to keep you on track.
Decide how much you can spend
Your holiday budget should come out of your disposable income or, ideally, a holiday savings account. (If you don’t have one set up, now is a great time to set one up.) If you spend money you don’t have, you could spend months paying off the debt you incur. Try to save up some money for the holidays quickly by cutting back on other expenses or indulgences.
Review your bills from last year
As a point of comparison, find out how much you spent over the holidays last year. Did you spend a little too much? If so, you’ll know you need to cut back this year. Or if things have improved for you financially, you might be able to add to your budget. Looking at last year’s actual bills can be a good starting point for this year’s budget.
Make a list, and check it twice
Just like Santa, you should make a list of everyone that you want to buy gifts for and include what you want to get them and the maximum you want to spend. If this list exceeds your overall budget, you’ll need to trim a bit. This could mean reducing the amount you will spend on each gift or getting creative and giving some people homemade gifts or cards. There are plenty of ways to show your appreciation for friends and loved ones besides expensive purchases.
Plan for holiday expenses beyond gifts
There are plenty of expenses you need to budget for beyond just presents. Consider food, drink, entertainment, postage, shipping, gift wrap, cards, decorations, holiday clothes, charitable contributions, and travel expenses. Make sure to keep all of these in mind when you are building your budget.
If money is tight this year, set expectations with family members, friends, and especially children. Discuss reasonable gift-giving tactics such as Secret Santa exchanges, grab bags, or setting cost limits.
Be a savvy shopper
There are lots of ways to capitalize on seasonal sales and find the best deals. Black Friday and Cyber Monday aren’t the only sales available. Many stores will have sales throughout the holiday season, so be on the lookout for those great deals. Just be careful not to get carried away in the sales hype. Have your list with you so that you are only buying what you need. Even a great sale can bust your budget if you’re buying something that’s not on your list.
As you shop, update your budget accordingly
If you went over budget for one of your recipients, or forgot to include someone on your list, don’t let that derail your planning. Adjust the amounts you are willing to spend on the other gifts to keep your total cost the same. Save all your receipts as you shop and track your actual totals vs your budgeted totals. Regularly check how you are doing so you don’t blow your budget.
Separate your holiday funds
If you or anyone in your household have a hard time sticking to a budget or avoiding impulse buys, consider separating your holiday budget from your regular checking account. This could be in a separate, dedicated account, or as cash for a tangible reminder of how much money is available. Put your holiday budget (or, for example, the amount that your child is allowed to spend) in an envelope and use that for your holiday shopping. Many people find this visual reminder helps them spend less.
Be smart with Credit Cards
When using credit over the holidays, you may want to limit yourself to using one card, it will be easier to track your expenses if you only have to monitor one account. Review your bills closely for any unauthorized purchases, and if possible, pay off your bill all at once to avoid interest payments. If you can’t pay it off in a single payment, try to pay it off within 3 months instead of spreading it out.
Set up a holiday savings account
You can boost your holiday budget by planning ahead and saving in advance. Start by establishing a holiday savings account that you contribute to throughout the year. Then, you’ll have money specifically set aside for your holiday budget and you’ll know exactly how much you can spend. You can open a Valley Holiday Club Account for low minimum deposits of $10, $20, $25 or $50, and upon maturity, can have those funds either direct deposited to you or mailed to you by check.
Be smart and proactive this holiday season. Create a reasonable budget for your holiday spending, stick to it, and see what a difference it makes. Your holiday season will be much less stressful and more enjoyable for all. Follow these holiday budgeting tips so you can focus on what matters most this holiday season, instead of worrying about debt.