The holidays are great for family get-togethers, vacations and bingeing on delicious food. While it is extremely enjoyable when it lasts, it does leave a huge hole in your pocket that is the opposite of enjoyable.
A good experience should not leave a bad after taste. When you look back at the holidays, would you rather cherish the memories of good times or be stuck thinking about the giant dent it made in your savings?
There are ways to ensure you keep your holiday spending within a reasonable limit. All it takes is a little planning. Here are a few smart moves that will ensure that you have a smooth holiday season that you can remember fondly without feeling the burn in your wallet.
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Create A Holiday Budget
Setting a holiday budget is paramount to ensuring that you can sail through the holiday season without suffering from a financial crisis. It may seem daunting, but it is a straightforward process. Once you figure out a formula for setting a holiday budget, you can reuse it every year with minimal changes.
You can start by noting how it goes towards repaying the debts that you are under currently, such as student loan or home mortgages. Next, calculate how much you need for your essentials such as grocery, transportation and utilities.
Now create a list of people for whom you need to get gifts. Then consider the amount for other holiday expenses such as eating out, decorations, parties, purchases during the sales, etc.
You can reach a reasonable holiday budget based on holiday expenses as well as your other expenses during the year. The key is to remember that the holidays should not sink all your savings.
You should have saved up enough for emergencies and other unexpected expenses. You can even consider a loan for a smaller amount if needed. But make sure that the amount is small and you can repay it within at most six months.
Start Shopping Early
Are you someone who leaves the holiday shopping to the last minute? Last-minute shopping can be the reason why your holiday expenditure is high.
When you leave things to the last minute, there is a chance that you may not get the gift that you had in mind for a loved one. In such situations, you will opt for the next best thing.
The next best gift may not be the best for your budget. It can cause you to overshoot your budget and spend more. Since there is little time left to search for another gift, you will be forced to settle for whatever is available readily.
On the other hand, there are multiple benefits if you start shopping early. Not only do you avoid the last-minute stress of getting the perfect gift, but you will get the gift that you had in mind. Even if the gift is unavailable, there is plenty of time to find another at the same price range.
Set Aside Money From The Start Of The Year
Holiday expenses are recurring. You have to face them every year. One way to ensure that the holiday season does not push you into debt is to start setting aside money towards the holiday budget right from the start of the year.
If you save up all year, then you only need to set aside a small amount every month. It will not make much of a difference to your regular monthly expenses, and it will ensure that you have enough during the holiday season.
Needless to say, it also alleviates the stress of getting enough money at the last minute.
Use Cash Wherever Possible
Digital transactions do have their benefits, and cash simply does not offer the same convenience as swiping your card. However, there is one advantage of paying for holiday expenses using cash.
It helps you stay within your budget. If you carry X euros as cash and promise yourself to spend only that much, then you are more likely to be mindful of your purchases.
When you pay with cash, you are aware of the money you have left to spend. When you use your card instead of cash, it does not register that well, and you are more likely to overspend.
Consider Your Financial Situation
You are not obliged to give anyone gifts that you cannot afford. While it may feel good to give someone an expensive gift at the moment, that is a decision you will regret when you go into debt due to uncontrolled holiday expenses.
A good way to understand your financial standing is to look at your credit report. CreditSpring’s guide to checking your credit report will help you if you are unsure about how to do it. You should also consider how much you have saved up and your current financial situation.
Do not give gifts that you cannot afford. Similarly, do not throw parties that you cannot afford. Your friends and family love you for being you, not because of your gifts.
You can even give personal handmade gifts. They are much more thoughtful than store-bought ones and show how much you care.
Weigh all Options
Strolling around the mall and getting gifts may sound fun, but if you know what gifts you are planning to get, then you should consider checking their prices. There is a good chance that you find a better deal online.
The same can be said for party supplies as well. If you find a good deal online, then take it. You can check out the prices in the physical store, make a note of them and then compare them with online prices before making the purchase.
Set a Limit on Impulse Shopping
Impulse shopping is inevitable during the holiday season. It is hard to deter yourself from impulse shopping entirely.
Instead, you can set a limit on impulse purchases. It allows you to have some fun while also ensuring that you can afford to have fun later.
Holidays are a great time to let loose and enjoy some quality time with your loved ones. Do not let the additional holiday spending stress you out. Use these tips to ensure that the holiday season does not end with you in debt.
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