Parties, gifts, travel, and events – the holidays are often a blur of activity and good cheer. Unfortunately, the season can also result in a flurry of expenses. In a 2012 poll by Think Finance, nearly half of those surveyed said they’d rather skip the holidays altogether, mainly due to financial concerns. Fortunately, you don’t need to play Grinch to keep from going into debt.Here are some tips for adjusting your budget now to allow extra room for spending over the next few months:
- Take a glance at holidays past. Understanding how much your spending typically rises in November and December can give you a better view of how much you’ll need this year. Reference past bank statements or go through the numbers via online banking tools.
- Get your budget on paper. SAC Federal Credit Union offers a free downloadable budget worksheet, where you can set a budget and determine your basic expenses. Knowing fixed expenses – like housing, utilities, loan payments, insurance, and other must-haves – will give you a better idea of your cash flow.
- Jot down a gift, food, and party expense list. The holidays tend to be chock-full of impulse purchases, and it’s easy to get off track by buying just a few “extra” gifts. That could lead to putting those purchases on a credit card and taking months to pay them off – leading to interest charges that bump up the overall price of those items.
- Spend incrementally … and wisely. Once you’ve mapped out what you’ll need to buy, start looking for those sales. If you leave your gift shopping to the last minute, you’re much more likely to buy whatever you can find, rather than the best deal. Start now, so you can take your time and make well-thought-out purchases.
- Track your spending. Because the holidays are filled with so many purchases, many people end up surprised at how much they spent. Create a system to help you stay on top of spending so you know when you may need to cut back. For example, you could put receipts in a folder and record them once a week in a simple spreadsheet or a notebook.
- Look at short-term areas for belt tightening. Maybe you can pack a lunch for the next few months or lower your entertainment spending. You might put off a larger purchase until after the holidays. Often, small changes can lead to significant savings, even if it’s only for a short time.
- Celebrate, but don’t get too caught up in the spirit. It can be easy to use the holidays as an excuse to throw financial caution to the wind. While this time of year might call for some special purchases, it shouldn’t derail your financial plans. Enjoy the moments, but don’t lose sight of your goals.
With some strategies in place – the earlier the better – the holiday season will be full of more comfort and joy than stress and debt.
How do you save during the holidays? Share your best tips on saving money in the comments.
Now is a great time to sit down and take a close look at your finances. Set up a free savings and budgeting consultation today.