One of the most difficult things to do is curbing your spending during the holiday season. Every time you log into social media or do a quick Internet search, you are bombarded with ads telling you what new gadget you need for the holiday season. Each ad screams that your loved ones will be obsessed with the newest and best gift this company is selling. And when racking up credit card debt during the holidays is the norm, cutting back on spending can be really difficult. However, by following some of the simple tips below, you can enter the New Year and not cringe when opening your credit card bill.
- Make a budget. Create a strict, but realistic budget for the holiday season. Be sure to include items like gifts, travel expenses, food expenses, and other line items that come up during the holidays. Here is a simple holiday budget example to get you started.
- Keep your money separate. Make sure you have your holiday money set aside once you have your budget created. It helps to put this in a separate account like a savings account, or even withdraw it in cash. Many people find cash to be an effective way to budget during the holidays as well. Separating your holiday money from your typical “bill money” for everyday expenses allows you to make sure you aren’t overspending and putting money on credit cards unnecessarily.
- Don’t buy gifts for everyone! This can be difficult if your family or friends are serial gift-givers. Our family started to switch from purchasing gifts for everyone for just the kids. You can also suggest a Secret Santa exchange, so everyone gets a gift, but each person only has to purchase one gift!
- Make a gift instead of purchasing one. Another way to cut down on overspending during the holiday season is to make some of your gifts instead of purchasing them. A simple handmade gift can be a great way to show a loved one you are thinking about them, without breaking the bank. Consider making a few batches of baked goods to hand out at the office as opposed to purchasing individual gifts for each coworker. Additionally, here are 25 ideas of DIY gifts to make in less than 15 minutes on a budget!
- Cash in your rewards. One of the best tips I have received about credit card rewards is to use it as a secondary savings account. Letting the rewards rack up all year and then cashing them out around the holidays is a great plan to give you a little wiggle room during the holidays! Start cashing out those credit card rewards because extra expenses always come up during the holiday season.
- Travel less. Coming home for the holidays can be really amazing, but also, increasingly expensive. If you typically come home for both Thanksgiving and Christmas- consider coming home for only one holiday this year. Instead, Skype or Facetime in for family dinner and save on expensive plane tickets or gas expenses. Additionally, you could drive instead of flying to save money as well. Some families consider travel expenses as the holiday gift, which is a great way to take some of the financial stress out of purchasing airline tickets as well as gifts.
- Make it a potluck. This one is really difficult for me, friends. I love to host Thanksgiving dinner, and with hosting, I usually make everything from the turkey to the pies. And with making the entire meal for our whole family, the grocery bill certainly got bigger. To help cut back on expenses during the holidays, consider having a potluck. If you are hosting, you could provide the meat, and ask each person to bring a side or dessert.
- Remember what it is all about. If you are going to remain financially savvy during the holidays, you want to make sure you have the right mindset. The holidays are all about spending time with the people you love, not about spending the most money. So, stick to your budget, ignore the ads, and enter the New Year in a tremendous financial spot!