Save Money This Holiday Season With These Simple Budgeting Tips
Published December 14, 2023
The holiday season is a time for giving… and spending. With the average consumer spending around $1,530 on gifts, travel expenses, and entertainment, it is no surprise that your wallet may feel lighter come the new year. Holiday expenses shouldn’t put a damper on your winter festivities. Follow these jolly tips on crafting your holiday budget.
Analyze Your Holiday Spending Habits
The first step to designing any budget is assessing your past spending habits. Take a look at your credit union statements from last year. Analyzing your previous spending patterns will give you a better grasp of how and where you spend your money during the holiday season. Here are a few questions to ask yourself:
- Are you an impulse shopper?
- What categories was your money allocated to? (gifts, travel, food, clothing, entertainment, and charitable donations)
- How much did you spend overall on the holidays?
- What unforeseen expenses came up on the statements?
- Did you primarily use debit or credit cards to make purchases?
- Are you a last-minute shopper or do you spend weeks preparing?
Once you have gathered enough information, you are ready to start formulating a better holiday financial plan.
Crafting a Holiday Budget That Works for You
Breaking your budget down by categories can help you portion out your spending priorities. These categories could include gifts, travel expenses, food, decorations, themed clothing, entertainment, and more.
When it comes to buying presents, budget your gift bucket by person. Having a budget for each recipient will not only help you stay within your budget, but it will guide you when picking out gifts in that price range. Have conversations with your loved ones about your holiday budget and set spending limits.
Tap into your creativity by making homemade gifts or split the price of a present with a friend or family member to save some extra dough. If your gift budget is limited, alternative ideas to buying individual gifts include an ornament exchange, a gift swap game, or giving the gift of time by taking the recipient on an excursion or spend time volunteering with a local charity organization.
If you decide to travel over the holidays, planning is key. Divide this bucket into sections:
- Transportation: Airfare, gas, car rental, and train/bus tickets
- Lodging: Hotels or home rentals
- Food: Groceries and dining
- Activities
- Shopping
While spending your allocated budget on your vacation, using a rewards credit card will earn you cash back on your purchases. Booking in advance can also give you opportunities to find travel deals which can lower the overall cost of your holiday getaway.
Hosting a large gathering can really add up. Save by re-using old décor and re-wearing previous holiday outfits. With rising grocery prices, delegate side dishes to your party guests or ask everyone to bring a dish to pass.
During the holiday season, your calendar may be booked by local holiday markets, light shows, concerts/performances, and cold weather activities. Be sure to factor these events and traditions into your holiday entertainment budget.
Knowing When to Spend vs Splurge on the Holidays
The season of giving doesn’t always have to be about spending. When constructing your budget, it’s imperative to know when to splurge and when to save.
- Themed décor: Don’t be tempted to change up your decorations and go for a different home aesthetic. Wait to purchase holiday decorations until the new year to secure your new home items at a heavily discounted price.
- Clothing: Buying new outfits for you and your family can put a big dent into your budget. Repurpose old clothing options and spruce it up with a smaller, less expensive accessory.
- Gifts for yourself: Before you think about treating yourself to an expensive gift, save the funds for another time.
- Full priced items: During the gift giving season, stores deck the halls with coupons, deals, and savings events. Price check items online and plan out gifts ahead of time to avoid impulse buying.
- Holiday meals: Before cooking and baking, take inventory of your pre-stocked grocery items at home before running out to the store.
Get on Top of Next Year’s Budget
The holidays are not the only time to start budgeting. Designing a sustainable budget year-round will help you achieve your financial goals and set you up for a more secure financial future. Don’t procrastinate on your holiday savings. Get ahead of your financial goals by joining a Christmas Club to slowly build up your budget for next year.
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