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5 Tips for Creating & Sticking to a Budget During the Holidays

Written by FinFit on .
5 Tips for Creating & Sticking to a Budget During the Holidays

The average American is expected to spend $920 on holiday gifts in 2019. If you have more than one person in your household buying gifts, this means your holiday expenses can add up quickly if you don’t plan ahead. Resist the temptation to fund your holidays with a credit card and look for ways to maximize the money you have. Here are a few ideas to help you create a game-plan for this year and better yet, start planning ahead for next year!

Create a budget for all the gifts you intend to purchase. 

It helps to list each family member/friend with an associated dollar amount – then it will be easier to see if you’ve forgotten someone on your list and what your budget totals.
Add a 20% buffer because last-minute things will come up, like gifts for party hosts.
Once you establish your budget for each person on your list, stick to it! Spending $5-$10 more per gift may not seem like a lot but it can add up quickly and push you well over the budget you planned for.

Take advantage of retailers who offer free shipping during the holiday season. 

Do a little research before you buy – there are likely multiple vendors that offer similar products. You’ll be able to compare prices, as well as shipping options. Shopping online is an efficient way to research (and purchase), and will keep you from being tempted by miscellaneous purchases or impulse buys when you’re standing in those long retail lines.

Suggest a group gift exchange. 

Having a large group of individuals to buy gifts for can be stressful. Group gift exchanges are a great way to spread holiday cheer without all the pressure of buying individual gifts for everyone in your life. There are many free online platforms that offer gift exchange services; they’ll allow you to add participants, set budgets, randomly assign gift-givers, and create wish lists.

Avoid spending money you don’t have. 

Overusing credit cards or taking on other debt for holiday purchases can be dangerous. It’s easier to overspend if you don’t have to account for it immediately and you will pay substantially more in interest and fees for those purchases. You can also gift someone something that doesn’t have a monetary value. Gifting your own prized possessions to your loved ones or your time to visit, share stories, and reminisce are also great solutions.

Set up a savings account and establish a dedicated holiday fund that you won’t go beyond. 

Better yet, start planning now for NEXT year! Imagine putting $20 away from each paycheck, starting at the beginning of the year. If you get paid bi-weekly, you’ll have $500+ available come the holidays.