Tis the season of giving—and sometimes overspending! As the holiday season gets closer, stores are filling up with one-day sales, limited-time offers, and exclusive savings when you sign up for a member’s card. This all sounds tempting. And you may start to feel that if you don’t act fast, you’ll miss the best deals before Christmas.
The debt you accumulate during the holidays may seem unavoidable. It’s all part of the season, right? Definitely not! Using credit cards to cover the sudden surge of buying gifts, decorations, and treats during the holidays can put you in debt in the new year! Which means while your family and friends are enjoying their fancy new gifts, you’re spending the next 6 to 12 months paying for them.
There are many ways you can avoid overspending and still have a wonderful time of year! To help you plan and keep your spending in check this December, try these tips below from the financial planning experts at Focus Financial:
Plan Your Holiday Spending Budget First: Before you buy even one gift on your shopping list, sit down, review your finances, and decide how much you’re willing to spend on presents this year. Consider how this amount will impact your ability to pay monthly expenses and be honest about it. Most importantly, when you decide on a number that won’t comprise your monthly budget, write it down and stick to it!
Avoid Impulse Buying: After you’ve created your holiday spending budget, list each person for whom you want to purchase a gift. Decide how much you wish to spend on each person and research some gift ideas that equal this amount. When you’ve chosen a gift, write it next to the person’s name on the list. This will allow you to stay focused during the shopping experience and ignore the flashing store signs that read “BIG SALE!” which could lure you to additional presents that you never planned on buying. Also, be sure to include a “last minute gift” column in your budget with a separate amount.
Use Cash vs. Credit: When you use cash instead of credit, you literally see your money dissipate. This means rather than mindlessly using a card to buy everything—only to see a large sum due at the end of the month—you have your money all accounted for and are more motivated to stay on target on each purchase.
Walk Away: Sometimes the hustle and bustle of other shoppers makes you feel like spending more to get the best deals out there. If you see a sale on an item that would be perfect for someone on your list, but you didn’t budget for it, walk away. It’s okay to change gift ideas, but before you impulsively buy the gift, go back to your holiday spending budget to see if you can rearrange items to purchase it. This doesn’t mean increasing your budget. This means making changes to the existing budget to get the right gifts. This is where the last-minute gift column comes in handy! Perhaps, you don’t need to use this amount after all, and you can shift that amount to a different column in your existing budget.
For more tips on budgeting and financial planning strategies, visit the Focus Financial website to learn more! And stay connected to our blog page for more helpful insights this season!