The season of giving is upon us, and we know what that means: pulling out our wallets and spending big bucks on gifts. While the holidays provide great joy and happiness, your bank account may not feel as much jubilation.
That’s why it’s essential to create a holiday budget and stick to it no matter what. Not only will a holiday budget help mitigate your stress, but it’ll also keep you from racking up debt and overspending this holiday season.
Below are well-thought-out strategies you can follow to stay on top of your holiday budget.
Make A List Of All Your Expected Expenses
So that you can start saving ahead of the holiday season, create a plan. Start by making a list of holiday expenses. Aside from the gifts for your loved ones and friends, make sure to consider gift exchanges at work, traveling expenses, wrapping paper, holiday food, and other things.
By doing so, you will know what things you need to pay for over the next few months for each person you are gifting. On top of listing out your expected holiday expenses, create an all-inclusive shopping list. Think of at least two gift ideas within a reasonable price range for each person you are gifting.
Correspondingly, you get to do proper research and come across the best deals on items. What’s more, you can choose a gift that your recipient will genuinely appreciate.
Figure Out Your Spending Limit
Once you know where your money will be going, know how much available money you have. Be sure to think carefully about your budget and, from there, determine how much leftover money you have to pay for the gift-giving season.
When deciding on your spending limit, only use the extra money you can dig out in your budget. The key here is not to spend more than you’ve saved.
Charging the gifts on your credit card only makes it easier to spend recklessly. Discuss a predetermined spending limit with your close friends and family members if you’re doing gift exchanges. It will not only help you but the others as well to stay within their means.
If you think your list seems long, don’t worry. All you have to do is to set some priorities. Review your list and number each item based on how invaluable they are to you. Put the highest priority at the top and the least at the bottom. You should fund these items first when you start allocating your holiday budget.
There is no better time to be generous and show your gratitude than during the holidays, in the form of holiday tips. But first of all, you should not feel obligated to tower over your budget.
If your budget doesn’t allow for tips, then consider giving out homemade gifts. Also, saying “thank you” is an excellent way to express your gratitude for a year of good service. So, how much to tip and to whom should you give a holiday tip? When deciding, consider the following points:
- The relationship
- Your budget
- Their position
- Your personal preferences
Keep Track of Your Purchases
Making a list of things does not mean that your job is over and done. To ensure you stay on top of your budget, you need to keep track of your expenses as you shop. You can do this by keeping a running total of how much you have spent and how much leftover money there is. By doing so, you will not risk overspending on one shopping trip.
To stay within your overall budget, consider creating a separate bank account, particularly for holiday spending. Deposit your spending limit into this account and then withdraw money from it for all your holiday expenses.
Make sure that you have a mobile banking application on your phone to check your balance at any time. What’s more, other tools can help you monitor your spending—for example, the envelope system.
You create a physical envelope for each holiday category and stow it with the right amount of cash. So, every time you make a purchase, all you need to do is get the money out of the envelope.
Setting a holiday budget is easy; however, sticking to it is hard. Often, it seems impossible to keep your expenses within the spending limit you have set for yourself. And the next thing you know, you are pulling out the credit cards and giving up in frustration. Fortunately, with a few adjustments in the way you shop for, plan, and celebrate the holiday season, you can avoid this pitfall.