The trees are throwing off their leaves, the colder weather is creeping in, and you know what that means… the festive season is around the corner! Before you know it, you will be making travel plans to see family, exchanging gifts, and eating festive meals. But the holidays can get expensive. So, before you get started with your holiday to-do list, do these 5 things to prevent overspending this holiday season.
1. Create a budget
It’s one of the cornerstones of personal finance: a budget. A festive season budget can act as your guide to help you keep more money in your pocket during the holidays. Like with your regular monthly budget, you can break down your expenses into categories, like travel, gifts, food, and even holiday-themed decorations.
Having everything in one place will help you visualize what your spending might look like and what you can afford, or where you should consider cutting back. Then, if you need to adjust your budget, you can do so before even spending a cent. This preparation will help ease your worries heading into the holidays.
2. Forget the debt
Nothing will dampen your holiday spirit like racking up more debt. Sure, paying for holiday gifts and travel with your credit cards might seem like a smart move, but digging yourself deeper into a hole of debt will only come back to haunt you. Do yourself a favor, don’t get yourself into more debt unless you have the money to pay it off right away without incurring interest.
3. Be open to new things
You might have a usual routine during the holidays: take a flight, prepare a lavish meal for your family, purchase luxurious holiday gifts, etc. What if this year you tried something different and helped yourself financially at the same time? There are a host of ways to not only try new things but keep from overspending as well:
- Transportation: The holiday season usually means lots of traveling. But there are cheaper forms of transportation than airplanes, and they even have their own perks. For a more scenic trip, take a train. Or opt to carpool on a long drive with an old friend. Not only will you save on transportation costs, but you can catch up on the way.
- Gifts: Instead of buying gifts, make one. Nothing says love like something that is handmade and from the heart. Or, instead of a physical gift, donate money to a charity in someone’s name.
- Go vegetarian: The holidays can mean a lot of meat-eating. While this is not only potentially harmful for climate change reasons, but it can also get expensive. Try going full or partially vegetarian this holiday season to save on the cost of meat. We can’t promise that all of your family members will approve, but it will be a great challenge to create delicious dishes without meat.
4. Know when to buy
The holiday season is full of supposed deals and discounts for consumers. But are these deals really as good as they appear? Special shopping days like Black Friday and Cyber Monday advertise deals that often seem too good to be true. The truth is, while prices seem marked down throughout stores, values can only be found on certain products. Many retailers use a tactic of discounting several items in a large way to get you into a store, but then you end up purchasing other items that aren’t as cheap.
Electronics can often be a good purchase during the holidays, but this can’t be said for everything. Try buying seasonal items in the off-season. For instance, the winter holiday months might be the perfect time to buy swimwear. Or, wait until the summer to purchase that skiing equipment you have been eyeing.
Another thing to note is that some of the best retail store sales come between Christmas and New Year. This is because retailers are trying to sell their leftover inventory from the holidays before the calendar turns to a new year, keeping the sales numbers on this year’s books. You can take advantage by looking out for some of the best sales of the year during this time.
5. Cut back where you can
No matter what, it’s likely you spend more money during the holidays than at any other time of year. And to some extent, that’s okay. The holiday season is a time of gift-giving and family, and it takes money to bring everyone together for this special time. Instead of chastising yourself for spending extra money on uplifting your holiday spirit, try to cut back on areas of your life where you spend more than is necessary.
The classic example of this is your daily coffee expense. Instead of paying €4 per day on a cappuccino, that money could go toward your holiday travel expenses. Think about it, if you start now and save that money for the next two months, you will have saved €180—enough to cover your transportation costs or gifts for your loved ones.
Gift yourself a happy holiday season. Don’t let your expenses ruin your festive spirit. It makes complete sense to spend money on holiday expenses that make you and your loved ones happy, but that doesn’t mean you must spend every cent you have. As long as you are vigilant in tracking your spending with a budget, do your best to reduce expenses, and avoid adding more debt to the equation, you can have a wonderful holiday season, and a prosperous New Year.