'Tis the Season
We’re officially in the “holiday season” and whichever holiday you celebrate, this time of year can either be blissful or absolutely dreadful. Holiday event schedules and the spending (oh the spending!) can send some people into an anxiety induced cookie eating frenzy. Over the next few months, most people will see an increase in their spending whether it’s for extra groceries for holiday meals, gift giving, outfits for holiday work parties, decorations for your home, or miscellaneous gifts for your mailman, teacher, or neighbor. Magnify Money put out a survey earlier this year. They found that holiday shoppers last year charged an average of $1,054 on credit cards during the season - an increase of 5% over the previous year. They also found that 44% of shoppers added more than $1,000 to their debt during the holidays, and 5% added more than $5,000 in debt.
The statistics showed that the average amount of time it would take to pay off this consumer credit card debt was six months. They came to this conclusion by averaging those who will only make minimum credit card payments, and those who had a plan in place to pay off the debt. That means that by July of next year, you will have (hopefully) paid off this year’s holiday debt, but only if you have a plan in place to repay it. This time of year can sometimes create anxiety, especially if you’re already on a tight budget. Don’t fret though. Her Money Mentor™ to the rescue! I am going to show you three (3) ways you can avoid overspending during this holiday season.
The first tip I have for you is to budget, budget, budget. If you don’t already use a monthly budget, don’t stress. You’ve got this. A budget is just a conscious spending plan. Check out this article I wrote about three mistakes to avoid when budgeting. There’s even a budget template link in the article. If you do already budget and haven’t added a holiday and gift giving category to your monthly budget, you can always start now. Better late than never, right? Planning for it now can keep you from paying for it later.
Once you've created your overall holiday budget, a lump sum allocated, break it down per person or per family. Don’t forget to include miscellaneous gifts for party hostesses, teachers, or other people you might want to give a memento to this season.
Track Your Spending
Now that you have set a budget, put a post-it note with the holiday budget on your debit and credit cards. That way when you pull them out to use them, you are reminded of your budget. We all need those reminders, and you will help your budgeting efforts if you keep those numbers in the forefront of your mind.
If you’re like me, you get most of your shopping done early so when Christmas rolls around you either forgot what you bought, or you get caught up in the marketing frenzy and feel like you haven’t bought enough. I’m sure you’re all familiar with that feeling of “I just need one more gift”, for that child who only has four presents under the tree while the others have five. To help with this I have created a free holiday budget and gift tracking checklist. Keep this list with you when you are shopping, whether it’s in the stores or online. I also like to write down what I bought and for whom, just for my own tracking.
If pen and paper aren’t your thing but you’re a person who loves her phone apps, then Santa's Bag (Apple) and The Christmas Gift List (Apple and Android) are two free apps you may like. Both have a place to track your holiday budget, as well as keep a list of gifts you've bought and for whom, plus additional relevant information. I’ve used both apps and I prefer Santa’s Bag. I like the way the budget is set up and I also like that there's a place to note whether a gift is homemade or not.
So now that you’ve set a budget and are tracking your spending, let’s get creative. If your last name isn't Rockefeller and you're trying to be frugal, then check out my Holiday Gift Idea Pinterest Board. Some of the ideas are DIY, and some of the pins might help spark another creative idea for you.
Here are more of my favorite money saving tips for the holidays:
- Buy gift cards at Costco, if there’s one near you. You can usually save money that way. They often have specials like buy $100 worth of gift cards for $80, or something along those lines. It just depends on the gift card packages at your nearest Costco. It's definitely worth checking into though.
- Shop Black Friday and Cyber Monday specials. Don’t lose your focus though. I’ve found that most people who go to the Black Friday sales end up buying things for themselves or for their home and still have Christmas gifts to purchase after the sales are over. Stick to your budget and stick to your list, and don’t get caught up in the store displays that pique your interest when you walk by. If you do have a list and your items are on sale during Black Friday, remember, you can avoid the crowded stores and get most of the same deals online.
- I also like to give family gifts instead of individual gifts to those who are extended family. Those gifts can be tickets to an event, a gift card for an experience (including the movies), or something off of Groupon. (My daughter bought me a Groupon once to have old VHS tapes of home movies made into DVDs. That was a great idea for a gift.) I also like themed baskets with DVDs, popcorn and candy. Or a family game night gift basket with board games and other goodies. (One year I was going to take my kids to Disneyland so my brother gave us all Disney gift cards that we could use while at Disneyland.) Get creative and spend your money wisely. No baby needs 10 tutus or 20 plastic toys that will end up on the floor of the closet...especially if you need to charge it on a credit card.
You Can Do It!
The most important thing to remember is that if you do overspend this year, make a plan to pay it off as soon as possible. If you really think about it, it doesn’t make financial sense to shop for bargains to save money and then charge your items and pay interest. You end up paying more for it than you would have if you paid full price (and then some). Be conscious about your spending this holiday season.
Then, as January rolls around, you’re going to start budgeting for all of the holidays that will come up next year, right? Start early and plan ahead.
*If you’d like to join our Facebook group, visit the Empowering Women Financially group. We’re there to support and encourage you to live you best financial life.*