5 Steps To Keep Your Holiday Spending In Check
Written by Deb Paulsen | Community Financial Education Coordinator
Black Friday is here to kick off the holiday shopping (and, for many of us, overspending) season. The joy of the season can easily be overshadowed by stress if you know you will be battling bills after the holidays have come and gone. Here are five tips to keep the holidays red and green while keeping your bank account in the black.
1. Get Talking
If you share bank accounts with a spouse or significant other, start by talking about your budget and determine how much you can spend and still keep up with your regular monthly expenses. Once you set your spending limit, have conversations with the rest of your family, friends, and co-workers. Eliminate the taboo of discussing how much money you are spending and instead use that information to set boundaries and eliminate “outspending” each other. Let others know that your goal is for everyone to enjoy a stress-free holiday season. During your conversations, ask them for gift ideas that they’d enjoy receiving within an assigned spending range. You may find that some would appreciate skipping the gift exchange and replacing it with meaningful time spent together or shared experiences. Many people are adopting minimalistic lifestyles and don’t want more “stuff” coming into their home, but would love to receive a gift of an evening out or a membership to a local museum.
2. Create A Holiday Budget You Can Stick To
Now that you have talked with others about how much you’re spending, create a budget that you can stick to. List each recipient, along with a few different gift ideas for them, and the budgeted amount for their gift. That way you have options and aren’t “stuck” having to buy that one perfect item. Don’t forget to include extras in your budget, such as holiday cards, stamps, decorations, baking supplies, tree, donations, food, and travel expenses. Add it all up and make sure that the amount is still within your agreed upon limit. If it isn’t, go back and make adjustments where needed.
3. Avoid Last-Minute Purchases
How many times have you put off shopping for a gift until the last minute and then overspent out of sheer desperation? Using your budget/gift list, peruse retail ads to see if any of the gifts you’re looking for are on sale. Don’t care to battle the crowds at the mall? Do your shopping online and use coupon tools like Retail Me Not, Honey, and Pricegrabber or earn cash back with Rakuten Ebates to ensure that the best deal is in your cart. Better yet, make your gift list earlier next year and shop the deals on Prime Day or Black Friday in July sales and spread out your gift expenses. With a little preparation, you could knock out most of your shopping early while scoring the best prices. But buyer beware: even with great deals, don’t be lured into purchasing items for yourself if it isn’t in the budget!
4. How You Pay Is As Important As What You Pay
If you pay for gifts with cash, you are more likely to stick to your budget. Having that tangible reminder that you have limited funds helps you stay the course. Using a debit card can also help keep you on track as long as you know how much money you have in your account. A no annual fee credit card with a low interest rate and rewards (such as a Royal Credit Union Platinum Rewards Visa®) can be another great option, as long as you plan to pay it off quickly. Earned rewards can be turned into free gifts, such as Visa® gift cards, that you can give to others. Many retail stores offer extra discounts on your purchase if you open a charge account with them during checkout. Be aware that retail cards often carry a higher interest rate, which could negate that additional discount if you don’t pay it off in full. Also, when you open a new charge account, a hard inquiry is made on your credit report which can lower your credit score. If you open more than one account in a short amount of time while chasing extra discounts at various retailers, it will lower your credit score even more.
5. The Best Things In Life Are Free Or Homemade!
Thanks to the popularity of decorating guru Joanna Gaines, all things homespun and simplistic have become trendy again. That means homemade gifts are not only affordable and acceptable, they are now some of this year’s favorite things! In some families, the adults draw names and have to either make a gift or buy something secondhand - nothing new allowed! It’s just as fun for the gift-giver to customize a gift as it is for someone to receive it. Don’t be fooled into thinking that you don’t have the time or talent for making gifts. Do you have a favorite recipe that everyone raves about? Can you upcycle something destined for the landfill into a funky piece of art, jewelry or furniture? What special skills do you have that would provide a much-appreciated service for someone else? Think about computer skills, organizing, dog walking, yard work, babysitting, cleaning, wood splitting, or window washing. Could you promise to make a special meal or “dessert a month” for someone? The possibilities are endless, especially when you use Pinterest, Instagram, or YouTube to get ideas for things that you can make. Not only could your gift be budget friendly, it could also be meaningfully customized for the happy recipient.
Try implementing some of these tips into your holiday shopping and swap out feeling stressed by finances with a sense of joy and peace. Empowerment over your finances is one of the best gifts that you can give yourself, and that feeling doesn’t have to end when the holidays are over!