Do you sometimes find yourself financially strained during the holidays? Do you start buying gifts, get the credit card bill the next month, and think to yourself “Did I really spend that much?”
If so, then you’re definitely not alone. A survey from American Express Pay It Plan It found that 86 percent of millennials (23 to 38) spent more money during the holidays than they planned to. And of those who overspent, 21 percent went over budget by approximately $500 or more.
It’s way too easy during the holidays to get into the spirit of giving. But if you’re not careful, the only person you’ll be giving to are all those bills you’ll have to pay later. That’s why in this post, we’ll explore five great ways you can control your spending and keep your finances in check.
1. Make a List
On a December weekend, you’ve probably said to yourself “Today I will go out to the stores and buy all of the gifts I need”. But then when you got there, you had no idea what to look for or what to get. Or, worse, you end up buying something you’re only 50 percent sure that the person getting it for will like.
Avoid all of that by planning upfront. Make a list of everyone you have to shop for and write down 1-3 ideas.
Don’t have any ideas? Ask them in advance for some suggestions. Or be sneaky and ask someone close to them (like a spouse) if there’s anything they think they’d enjoy.
Either way, getting those ideas onto a list will help you be more targeted and spend with a purpose. Plus, you’ll have much better chances of getting your loved ones something they actually want!
2. Assign a Budget
Wouldn’t it be great if money was no object and you could buy whatever you wanted for everyone on your list? Unfortunately, if you’re like most people, the money you spend during the holidays doesn’t just appear out of thin air. It has to come from somewhere, and that’s usually your bank account.
To make sure you don’t get yourself into debt just because you’ve got presents to buy, you’ll need to set an overall limit for yourself. This can be done easily while you’re making your list. Write a dollar amount next to each persons’ name and let it be the maximum amount that you’re willing to spend.
Total up all of the amounts and see if it’s reasonable. If it seems like it’s going to be too much or you simply don’t have the funds to cover it, then be realistic. Go back and make some adjustments as necessary.
Not only will this help keep your spending in check, but it can also ensure that your spending is balanced. For example, if you’ve got five nieces and nephews, then you can make sure they each get the same dollar amount.
3. Comparison Shop
How many times have you bought a present, came home, and then discovered it was online for less? Sometimes much less!
Hey, it happens to all of us. However, there’s a way you can reduce the chances of it happening: comparison shopping.
As you’re writing out your list of potential ideas for each person, check the price of those items at well-known online retailers like Amazon or Walmart. Then, dig a little deeper:
- Look for Black Friday or Cyber Monday deals.
- See if there are any online exclusive sales.
- Don’t forget sites like eBay. Lots of people sell brand-new, never been used items on eBay for really cheap.
Again, this is just one more advantage that making a list and having a plan can provide you. The more thought and strategy you invest upfront, the better the deals you’re going to find.
4. Don’t Forget About Credit Card Rewards
Do you have a credit card that gives you rewards points every time you shop? Are those points that you can redeem for cash, a statement credit, or gift cards?
If so, then don’t let them sit around collecting dust. Redeem those points and put them to use for your holiday shopping.
When it comes to gift cards, the credit card companies have affiliate relationships with pretty much every major retailer and restaurant you can think of. So whether someone on your list wants a gift card to a trendy store, their favorite gift card, or even a coffee chain that they love, chances are they’ll have it.
Depending on the credit card, you can sometimes even get gift cards at a discount instead of redeeming the points for straight cash. For example, Discover Card will often have specials where you can redeem select gift cards in increments of $25 by only spending $20 of your points.
Even if you’d prefer not to give gift cards away as presents, you can use them as payment or statement credit to buy other presents. For instance, some credit cards will let you use their points to make purchases on Amazon during the holidays. That means you can literally buy anything you want!
5. Plan for Next Year
It’s no surprise that the holidays come around once every year at the same time. Yet, so many of us are unprepared for the additional expense it brings.
Planning for the holidays is no different than another major purchase. Just like you take steps to pay off your debt, save for a down payment, or build a nest egg, it’s easiest to do this when you do it in small, bite-sized pieces throughout the year.
That’s why I’d recommend you start saving right from December 26 onward. Estimate how much money you’ll spend next year. If you don’t have a clue, you can use this year’s total as a starting point. Divide that by 50, and then start socking away some money week after week.
When you approach it in this way, you’ll be surprised at how much you can do with so little. For example, just $20 per week will give you a budget of $1,000 to work with next year.
A great way to do this is to use a budgeting app like Buxfer. Set Holiday Gifts as one of your expenses and then adjust your other expense to fit it in. Because Buxfer connects with your banks and credit cards, you’ll always have real-time data of how well you’re sticking to your budgeting goals and if any improvements are needed.
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