The holiday season brings the excitement of gift-giving, festive gatherings, and meals shared with family. However, it’s also a time when many people find themselves spending more than anticipated. While it’s easy to get caught up in the holiday spirit, keeping financial health in mind can help maintain balance and reduce stress. Here are some practical approaches to help you manage your holiday budget:
- Create a Realistic Budget
Before diving into holiday shopping or planning, it’s helpful to determine how much you’re willing to spend. This includes gifts, travel, food, decorations, and other seasonal expenses. Setting limits for each category can help manage costs and prevent overspending.
According to NerdWallet, Americans plan to spend about $17 billion more on gifts and about $46 billion more on flights and hotels this year than they did last holiday season. There is so much temptation to overspend, but a budget can act as a guideline to assist you in prioritizing what’s most important. Revisiting your budget regularly as the season progresses can also help keep spending on track.
- Make a List and Stick to It
One way to control spending is by making a list of everyone you plan to buy for, along with potential gift ideas and price ranges. By having a clear list in hand, it’s easier to avoid impulse purchases and stay focused on what you need.
If you’re shopping in stores or online, try to avoid distractions that might lead to extra, unplanned purchases. Holiday sales can be tempting, but sticking to your pre-planned list can help avoid buying items that don’t fit within your budget.
- Look for Deals, But Be Cautious
Holiday sales events, including Black Friday and Cyber Monday, offer a chance to save on gifts. Comparing prices across retailers can help determine whether you’re truly getting a good deal. It’s also wise to avoid buying something just because it’s on sale.
Tracking price trends before the holiday season can also provide perspective on when an item might be offered at its lowest price. Some retailers provide price matching or special promotions that can help stretch your budget.
- Avoid Last-Minute Shopping
Rushed, last-minute shopping can lead to overspending. When you’re short on time, it’s easier to buy more expensive items or miss out on opportunities to compare prices. Starting early in the season gives you more time to find thoughtful gifts that fit within your budget.
Planning in advance also allows for more flexible shipping options, which can save on the costs of expedited delivery for those who are purchasing gifts online.
- Consider Alternatives to Expensive Gifts
Gifts don’t always have to come with a high price tag. Homemade gifts, such as baked goods, crafts, or personalized items, can offer a meaningful and more affordable alternative. Experiences, such as a family outing or a shared meal, can also be a thoughtful way to celebrate the season without overspending.
For larger families or groups of friends, organizing a gift exchange—where each person buys for just one other—can help reduce overall costs while still providing the joy of giving.
- Use Credit Cards Responsibly
Many people rely on credit cards for holiday shopping, but it’s important to be aware of how this spending aligns with your budget. Consider keeping track of purchases as you go and aim to pay off the balance in full each month to avoid interest charges.
Some credit cards offer rewards, cashback, or points for holiday purchases, which can add value to your spending. However, it’s helpful to remember that these rewards should not drive spending beyond what is budgeted.
- Plan for Other Holiday Expenses
While gifts often take center stage, other holiday-related costs can add up quickly. If you’re planning to host guests or travel during the holidays, it’s helpful to factor these costs into your holiday budget.
Planning meals and events in advance can help avoid last-minute splurges, and sticking to a shopping list for groceries or decorations can keep these extra costs under control.
- Reflect on Last Year’s Spending
Looking back at how much you spent in previous holiday seasons can provide insight into what worked well and where you might want to make adjustments. Were there areas where you overspent or felt unnecessary pressure? Did any expenses surprise you?
This reflection can help guide your financial decisions this holiday season, making it easier to stay within your desired spending limits.
Final Thoughts on Smart Holiday Spending
Smart holiday spending doesn’t mean cutting back on the joy of the season. By budgeting, planning, and making thoughtful decisions, it’s possible to enjoy the holidays while keeping your finances in check. Thoughtful preparation and careful attention to how you spend can help reduce stress and allow you to focus on the things that matter most during this time of year.
Sources:
- [1] https://www.nerdwallet.com/article/shopping/holiday-tips-news/2024-holiday-spending-report
- [2] https://www.yahoo.com/lifestyle/live/the-best-black-friday-2024-deals-you-can-still-get-from-amazon-apple-macys-walmart-wayfair-target-and-more-141948802.html
Amy Anderson joined the ILG Financial team in 2023 as the client relations coordinator. Her responsibilities include scheduling of appointments, annual check-up notifications, and annuity and required minimum distribution assistance. She is a graduate of Harding University with a degree in Computer Information Systems. Amy and her husband have two children and she enjoys reading, crocheting, music and spending time with her family.
Chase Lopez joined the ILG Financial team in 2020 as an advisor. Chase is a 2016 James Madison University graduate with a degree in management. Chase has been trained under the tutelage of Dave Lopez, who is not only the founder and managing member of ILG Financial, but also is Chase’s uncle and godfather. He also enjoys working alongside his cousin, Megan, who is Dave’s daughter. Chase, as a fiduciary, believes in putting his clients interests first, and building out plans for his clients where they can have a happy and fruitful retirement. He married his beautiful wife in February 2022 and both use most of their free time chasing around their little pup, Aurora.
Jessica Carson joined the ILG Financial team in 2018 as an agent. Jessica and her husband have four children, two dogs, 3 barn cats, 5 chickens, and three parakeets. She indeed loves her children and pets! When not at work, Jessica enjoys playing the piano and cello as well as traveling and spending time outside with her family, hiking, fishing, and boating.
Terri Center joined the ILG Financial team in 2019 as client services manager. She handles client records, application processing, and gathering information to provide a professional and friendly experience with all of our clients. Terri is a graduate of Oakland University. She is married and has two children. She enjoys hiking, family time, and puzzle challenging video games. She also likes to share her creativity in her canvas paintings and sewing projects.
Megan Jones joined the ILG Financial team in 2020 as marketing director. Megan and her husband live in Fredericksburg, VA with their German Short Haired Pointer, Gus. Megan is a graduate of Longwood University and holds a degree in communications. Megan is the oldest of Dave Lopez’s three children and not only enjoys working alongside her father, but also with her cousin, Chase, who joined the ILG Financial team in 2020 as an advisor. When not at work, Megan enjoys sitting on the back porch with family and friends enjoying food and music.