Managing Holiday Spending
‘Tis the season for holiday shopping, baking, and spending time with friends and family! As you’re preparing to go gift shopping for your friends and loved ones, a budget probably isn’t the first thing on your mind. While the holiday tradition of gift shopping is wonderful, it can also leave a painful amount of debt on your credit cards – leaving you stressed and unable to catch up on payments. It’s important to remain realistic about your financial expectations and set limits for yourself to prevent over-spending. It’s possible to still give gifts this holiday season without breaking the bank! Here are just a few ways you can manage your holiday spending:
Make a budget and set limits. Yes, we know it feels better to just spend money without thinking about the damage, but the results can be catastrophic. Instead, sit down with your spouse and calculate how much is a reasonable amount to spend on gifts this year. Having a specific number in mind will help you prioritize and prevent spending too much. Be sure to not only set limits with your bank account, but also with your credit cards. It’s extremely tempting to just put gift after gift on your line of credit, but this method of spending is unhealthy, and can lead to massive amounts of credit card debt. By calculating and setting responsible limitations, you can enjoy holiday shopping guilt-free.
Give homemade gifts. Sometimes gift giving, especially in family situations, can seem like a bit of a competition. However, buying the most expensive gift doesn’t mean it’s the most meaningful! Instead of competing with your parents or siblings, create a priceless homemade gift, such as ornaments or baked goods that every family member will enjoy. Things like recipes and delicious treats aren’t something that can be store-bought, and your gift recipients will be extremely grateful for the time and effort you put into it all. Homemade gifts are becoming more and more popular, so give a thoughtful present this holiday season.
Don’t buy all at once. Instead of going on one giant, damaging shopping spree – try to complete your holiday shopping over a month or two. It’s a good idea to buy one or two gifts with each paycheck, instead of spending hundreds or (thousands) of dollars all at once. If you can save up a little for Christmas in the months leading up to the holiday, then you can spend guilt-free knowing that the money was designated for the specific purpose of purchasing gifts. If money is tight – don’t worry about looking strange if you’re doing some of your Christmas shopping in October! Your wallet will thank you later on.
At Richard Banks and Associates, we know that the holidays can bring a lot of financial pressure. By establishing good spending habits, you can eliminate spending guilt and enjoy holiday shopping with your family and friends. Call us with your financial questions this holiday season! Have a safe and wonderful week.