With the holiday season quickly approaching, it’s possible you’re feeling the beginnings of some finance-related stress.
Whether you’ve overspent in the past and are worried about it becoming a pattern, your family has grown and you seem to have a never-ending list of people to buy for, or the year has already thrown some financial pressure your way and you know it means this holiday season is going to look different for your family, I get it.
There are a lot of emotions held in the holiday season and with a year that’s already held so much emotion on its own, you might be feeling overwhelmed.
To begin to tame these emotions, start to create a plan and budget regarding your holiday spending. Here are six things you can do to begin to gain some clarity around your finances.
Create a realistic budget
I recommend accounting for holiday spending in your yearly budget, so that the amount you need to save is spread out among the entire year. However, if you’re just starting out on your financial journey don’t worry! Start by creating a realistic budget for how you will spend your money for this season that is already upon us, and then, moving into next year, look at creating a more comprehensive budget.
To create a budget this holiday season, start with making a realistic list of all your holiday spending. Example, gifts, extra food, decorations, secret Santa, and charity giving. Also, don’t forget to include the cost of shipping, since we’re mostly purchasing our stuff online these days, due to COVID-19.
For each category write down how much it will cost and then add it all up.
The number you get when you add up everything, is what this holiday will cost you. Do you have that money already put aside, or will you be using your line of credit or your credit card and then spend the next few months or years paying of the debt?
I know it might feel limiting, but focus on your larger financial goals, and remind yourself how good it would feel to stick to your budget. And guess what, it would feel even better to be debt free!
This year has looked different for all of us, and based on what the year threw at us it makes sense that the holiday season will reflect that.
Large gatherings and travel are likely out of the picture, so begin to talk about what the season will look like. For those in your larger family that you normally see, will you be planning virtual visits? Will there still be a gift exchange via mail?
Sit down with your immediate family and discuss the plan. If you know you need to spend less than years prior, be honest about what that will look like.
Focus on what you will be able to do and what you do have control over: quality time spent with those in your close family, a few meaningful gifts, and good food are all on my list!
Plan your purchases
Make a plan for those who you will be purchasing gifts for. Write down the person’s name on one side of a piece of paper and across from it brainstorm a few meaningful gift ideas you know the person would love.
Set a dollar amount for this person and stick to it, ensuring it fits in your overall holiday budget. Don’t forget to include the cost of any extras like wrapping paper and shipping.
Having a list in hand or written out can help avoid impulse purchases (both in store and online).
Start shopping early
The earlier you’re able to start shopping, the better you’ll be able to watch for deals. Do your research and take the time to compare offers and watch for sales.
As you’re comparing prices though, keep your timeline in mind. Especially if you’ll be doing more online shopping this year, you’ll need to take processing and shipping times into account. The longer you wait to order, the more likely you are to be hit with expedited shipping costs, which might put you over budget!
Keep an eye on your bank statements
With the rise in online shopping, it’s more important than ever to ensure you’re protecting yourself from identity fraud!
Check your bank statements regularly, along with taking these other precautions.
Remember, this season is really about spending quality time with those we love. While we may not be able to do that in the same way this year, it doesn’t mean we need to compensate by spending more money.
Find new ways to give, whether that means homemade gifts (DIY projects, baked goods or crafts), supporting local small businesses, finding thrifted items you can repurpose, suggesting a secret Santa type gift exchange where rather than buying gifts for everyone, you’re only tasked with purchasing for one person, or simply finding creative ways to spend more time together.
Whatever the season looks like for you, I hope that these steps help reduce the financial stress of the holidays, and allow you to spend more time with your loved ones.
If you’re looking for assistance creating your budget, please feel free to reach out! I’d love to help.