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Are you overwhelmed by the gift buying bonanza that happens every holiday season? If so, you’re not alone. According to a 2017 Harris poll
, 70% of Americans wish they didn’t have to buy gifts this holiday season and 43% of Americans feel pressure to spend more than they can afford. Holiday spending can also wreak havoc on your budget. Economists estimate that the average American spends a whopping $1,000 on Christmas each year!
If you’re feeling caught in the current of overwhelming holiday spending, don’t worry. We have some tips to spend less money and enjoy the holiday season a bit more.
Set Spending Limits.
Look over your monthly budget and decide what you can safely spend on the holidays. Is there discretionary spending on fancy coffees or fancy restaurants that could go towards gifts? Whatever you decide, just be realistic so you don’t break your budget.
Use an Envelope System.
An envelope system is a great way to ensure you stay within your spending limits through the holiday season. Create envelopes to contain the budgeted amount of cash for each of your spending categories (or gift recipient, if you want to apply this strategy to your holiday shopping). When that cash is gone you are done spending until it’s time to replenish it again based on your strategy. Create a holiday spending envelope where you set money aside for gifts and goodies, and possibly fill it with unused money from other budget categories.
Resist Reciprocation and Feelings of Obligation
. Nothing can kill a holiday budget like trying to out-gift other family members. Instead of feeling obligated to buy everyone gifts, create a list of those who will receive presents and another for those who will instead receive something else like baked goods, a phone call, or even quality time. Many Americans buy gifts out of obligation and spend according to what others are spending on them. Resist the pressure to match or outdo the gifts of others!
Beware of the Store Credit Card Sales Pitch.
Being offered a store credit card at check-out has become quite the norm these days. While 30% off your large purchase may be enticing, remember that opening a new card does impact your credit score and creates one more thing for you to manage. With that said, how you manage a merchant-based credit card is reported differently to the credit bureaus than a general credit card and can help your credit score if you use it responsibly. Either way, make sure you plan ahead as to how you’ll respond to the store clerk and act accordingly.
. While paper coupons are still a great way to buy things for less, many stores now offer apps that feature in-store deals like Target’s Cartwheel. Many coupon apps and websites allow you to set up notifications on when your favorite items go on sale to buy what you want for less.
Don’t Succumb to the Pressure.
Each year, we watch news footage of unruly mobs overtaking a local big box store in search of discounted goods. Some of us even brave the cold and sit out for hours waiting for the doors of our favorite stores to open. While the activity of shopping can be fun, give yourself permission to walk away empty-handed if you don’t find a great deal on something you actually want. Find ways to prevent yourself from being swept up in the moment and buying something you never intended to because it was fun.
. Would your parents, aunts, uncles, cousins, siblings prefer some quality time with you instead of an item purchased in a store? Would out of town family members prefer a visit over a purchased item? Do you have an artistic, culinary, or other skill with which you could create a unique gift for a loved one like a painting, a baked good, etc.? Creating unique personalized gifts is a great alternative to buying impersonal and often more expensive gifts that may not be of interest to the person receiving it. Consider the recipient – they may actually help you save money.
Create a New Tradition
. If you are struggling with overspending, it may be that your friends and family are as well. Consider organizing a group volunteering day instead of a gift exchange. Eliminate buyer’s remorse by creating opportunities for quality time with family and friends that focuses on things other than presents. Encourage family members to donate to a cause in lieu of buying a gift for you. If gifts are an important and fun tradition, consider a Secret Santa gift exchange or White Elephant or create a list of needs that family members have that can be fulfilled by the gifts being given.
Don’t be discouraged if all doesn’t go according to your thrifty plan during the holiday season. Even a few new habits and traditions can yield big savings. Allow your plan to be flexible and follow your financial gut for a happier holiday this year.
Contents of this blog article are intended to provide you with a general understanding of the subject matter. However, it is not intended to provide legal, accounting, or other professional advice and should not be relied on as such. Information may have changed since the publication date.