As the winter holidays approach and you begin gift shopping, having a plan to keep your finances in order will ensure a financially successful season and a less stressful start to the new year. These 7 tips will help you keep your budget on track during the holidays.
Tip 1: Make a list and check it twice!
Santa doesn’t have a budget, but you should! Set a limit on how much you can afford to spend in total; make a list of everyone you want to give gifts; plan what you want to give each person; and set a dollar amount for how much you can spend on each person. Be sure to include a cushion in your budget for additional expenses beyond gifts, like decorations, wrapping paper, greeting cards, and travel. Keep in mind, the end of the year is a time when large annual or semi-annual costs like car insurance, life insurance and property taxes arise. Make sure to bring your list with you when you shop so you can stay on track.
Tip 2: The early elf gets the deal!
Avoid putting a major strain on your wallet (and your sanity) by taking advantage of other big holiday sales that happen earlier in the year. While you’re planning ahead, you can set aside money each week or each month so that you’re not spending a large portion of your earnings at the end of the year. Planning early also gives you more time to compare prices and find the best sales.
Tip 3: Tis the season to be thrifty.
Be a savvy shopper this season! Try to find coupons for the items you plan on purchasing and see what stores are running sales. You might even use your credit cards’ reward points that you’ve been accumulating all year to save additional money. Consider making homemade presents, like photos for grandparents or cookies for your kids’ teachers. Most importantly, don’t stress over giving the perfect gift. Oftentimes your presence is the best present!
Tip 4: Using cash keeps you on the Nice List!
Using cash for your holiday shopping is the easiest way to keep your spending on track. Stop by the ATM on your way to the store to get cash, and that is your budget for the trip! With cash, you’ll know exactly how much you already spent and how much you have left to spend. When the money runs out, you know the shopping trip is over.
Credit cards are a convenient but dangerous way to pay. It’s easy to swipe, swipe, swipe your card at each checkout without realizing how much debt you’re racking up. If you’re using credit cards for your holiday shopping, only take the cards you need and track your balance(s) as you shop. Make sure to stop when you’ve hit your limit!
Tip 5: Don’t fall for reindeer games!
The holiday season is a fraudster’s favorite time of year. They use the busy shopping and travel season to their advantage in scamming unsuspecting victims. Beware of texts, calls, and emails that claim to be your bank, a store, a delivery service (E.g. USPS or FedEx), or travel/accommodation company (E.g. airline or hotel). The number of fake sales and charities also rise during this time of year, so be careful of where you shop online and who you donate money to. Learn to spot the red flags of a scam so you don’t fall victim – below are a few resources.
Common holiday scams
Warning signs of a scam
Donating to charities safely
Online shopping scams
Travel scams
Tip 6: Don’t get your tinsel – or receipts – in a tangle.
Use the calculator or notes app on your phone to keep track of how much you’re spending and keep checking it against your budget. Be sure to keep your receipts so you can check them against your statements. You can also use online and mobile banking to easily monitor your accounts. When it comes time to set your budget for next year, you can reference your receipts to help keep it realistic. Be sure to keep receipts or acknowledgement letters for any charitable donations you have made if you want to receive tax deductions in the spring.
Tip 7: It’s beginning to cost a lot like Christmas
Shopping is done and presents are wrapped, but the work isn’t over yet. Now it’s time to make a payoff plan. Map out what you owe so you know exactly where you stand financially. Double check your receipts against your bank and credit card statements, making sure that they match and there are no fraudulent charges. Save on credit card interest by paying early and over the minimum payment amount. Make sure to prioritize paying off the cards that have the highest interest rates. Reducing your spending during the first quarter of the new year while making regular payments can help lower your balances faster. If you can’t reduce your spending after the holidays, try to use cash.
