Budgeting Tips for the Holidays : How to Avoid Overspending
Updated: Feb 20
Budgeting Tips : Nothing says holidays like festive meals and fancy cocktails. Or gifts and decorations. Or maybe fine dresses and traveling. Well, piling expenses to be more precise. For a lot of us, holidays are that time of the year when stress levels peak and there is no way to avoid the financial pinch.
If you experience the same, it might bring you some comfort knowing that you are not alone. In fact, it is estimated that people spend $1,047.83 on average during the holiday season. While it is quite natural for a lot of things about the holidays to burn a hole in our wallet, a holiday that comes with the baggage of debt and financial stress is not a holiday at all.
Budgeting Tips for Holidays
But the question is, how do we celebrate the holidays without busting our budget or ghosting our extended family?
Read this post to find out how to budget for the holidays with great care and savvy plans!
Make a List of Holiday Expenses
The first budgeting tip for the holidays is to make a comprehensive list of all the expected holiday expenses. This list should include everything from gifts, traveling expenses, donations to small expenses like wrapping paper and snacks.
Here is a spreadsheet that’ll come handy.
Making a list will give you a broad overview of all the expenses that are necessary and the ones that are not. Besides, people often underestimate the gifts or traveling expenses and later wonder how did they lose money hand over fist during the holidays. Even the best budgeting tips will not get you anywhere unless you account for all the expenses, no matter how big or small.
Set Spending Limits for the Holiday Season
The whole idea of budgeting smartly for holiday expenses is about setting limits to keep your bank account from running dry. After you have made a list of expenses, use this tool to get your budget into fighting shape. Drop the expenses that you can do without and limit yourself from overindulgence and impulsive buying.
While the money you are going to spend on gifts cannot pay for your bills, there is a way to spend a little more without compromising on gifts or bills. Interestingly enough, you don’t even have to wait for the leftover at the end of the month for this.
All the money that you would normally spend elsewhere, like a morning latte, can go into the spend-a-little-more fund. Two things that you need to be mindful of are that this spending should be with cash not credit cards, and you have to be realistic while choosing the expenses that you can limit. For instance, going overboard and spending your clothing budget on gifts will only leave you empty handed when it is time to buy snow boots.
Budgeting Tips : Price Check Everything Before Buying
Another smart budgeting tip for the holidays is to check the prices of everything you have to buy online and by checking advertisements. Feel free to benefit from deals, sales, promotions, etc. offered on shops, Black Friday and Cyber Monday. Buy things that get you a huge bang for your buck.
You should also check websites like eBay or Craigslist before you purchase an item from a shop or anywhere else online. Sometimes second-hand and used items are just as good as brand new ones. For all you know, this might also help you end up finding hard-to-find items or vintage collectibles.
Get Creative or Re-Gift
Re-gifting or making your own gifts might sound like a cheapskate idea, but there is always a right and wrong way to do it. One good philosophy that you should always stick by on the holidays is to spend money on gifts that people want or need. This goes just as well for re-gifting and DIY gifts.
So if you have unused gift cards or gifts that have remained unopened, they can be great options to repurpose and lower your holiday spending. You can also go a step further and create gifts yourself for friends and family. You can customize a picture frame with a memorable photo, design a customer t-shirt online or knit a sweater, etc. Needless to say, any type of “sweat equity” gift can be as valuable as something you bought from a shop.
Track Your Purchases
Once you have started preparing for the holiday season, keep track of all your holiday spending. Every time you go out to shop for gifts or any other item for the holidays, bring along the list and your budget sheet.
If you are using a budgeting app like Doctor Money, it will save you the trouble of carrying so many sheets with you that might make you look like a dork.
Moreover, as you begin to spend, keep subtracting the amount from your running holiday budget total. This will allow you to stay updated on how well you are doing and if there is a need for any adjustments.
Resist the Temptation
Lastly but most importantly, you have to keep your impulsive buying in check all along. Every time you go out shopping, buy what you went for and then leave. All of us want our loved ones to be happy during the holiday season. And thinking that giving them an expensive gift will do it would not help. It’s time to step down that ledge and pick a valuable gift without breaking your holiday budget. For happiness, a little love is just as valuable as the ultimate gift.
It’s a Wrap!
The holiday season is about giving and receiving love. It is a time to reflect on your blessings and make life a little easier and a whole lot merrier for those around you. But amidst all the celebrations, we must not forget that this is the season of giving rather than spending. While the growing consumerism mindset might have tricked us into believing otherwise, setting the right expectations and budget, getting creative and savvy can help us keep the wolf from the door.
If you need some help managing your spending and savings this holiday season, download the Doctor Money app for smart financial management. Get your holiday mode on, don’t overdo it and be merry!