Halloween has barely passed, but shoppers are readying themselves and their budgets for some major holiday spending. Between Thanksgiving and buying gifts for friends and family, your wallet may be feeling pretty thin. But just because it’s the holidays doesn’t mean that you can stray from your monthly budget. As November leads into December, take the time to sit down and map out a holiday spending plan to keep your savings on track.
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As you plan your budget, be aware of certain pitfalls, such as overspending or impulse shopping. With a proactive plan, you can be sure to spend your money wisely and make the most of your shopping this holiday season.
Know how much money you have. Just as you would with your regular budgets, you should understand how much money you have before you look into purchasing gifts. When you plan your usual monthly budget, take a look at how much money you have left and think about how much of that extra money you need to save. You’ll want to establish a total maximum spending amount and generally outline how much to spend on every person you plan on gifting. And while it’s important to set a spending budget, be careful not to set a budget that is too tight. By setting an extremely tight budget, you leave yourself little wiggle room for any last-minute purchases and it can be difficult finding just the right gifts for your family. In fact, such a narrow budget might cause so much frustration that you decide to forget your budget and overspend. Leave yourself some extra cash for unexpected purchases and any little costs that might pop up throughout the holiday season. The ultimate goal? To avoid spending any of your savings or running out of funds that would otherwise go toward things like rent and living expenses.
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Get a head start on shopping. Even though Thanksgiving is still on the horizon, it doesn’t hurt to start accumulating all of your gifts now. Holiday prices tend to fluctuate based on supply and demand. So, to avoid increasing prices, it’s best to begin purchasing your gifts ahead of time. For example, items that are selling out may see an increase in price as Christmas draws closer. Or the price of an item that isn’t selling very well may drop in the last week of shopping. Avoid the price fluctuation and begin searching for your goods online and in stores. With at least a month before the holidays, use this time to comparison shop and find the best deals. Instead of buying clothing in stores, consider researching the same item on sites like Amazon. Or sign up for email lists at your favorite retailers for electronic coupons. Thanks to the internet, you can start shopping for all your gifts now without ever having to step foot in an actual mall. And by shopping early, you can avoid running out of money you would budget for other expenses in the upcoming months.
Take advantage of your credit card rewards. There are tons of cards available to consumers, and many of them come with special rewards for every dollar you spend. Look into opening credit cards that reward your most frequent spending behavior, such as traveling or shopping at supermarkets. Certain cards will offer double rewards points for specific shopping behaviors. If you can reach the minimum amount to get a sign-up bonus, opening a new card before the holidays could save you some extra cash. Just make sure that you’re opening the right card at the right time. If you’re opening an account that rewards frequent fliers but you don’t anticipate any trips in the near future, you may want to look into a card that rewards shopping at supermarkets instead. And it’s worth skipping a store credit card, too. While these cards can offer huge savings for shoppers when they open a store card, it’s important to read the fine print for any additional fees and to think about when you’ll buy again from that particular store after the holidays end.
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Every little saving counts. As you prepare your family for the upcoming holidays, look to where you can cut back in your daily routine to start saving. For example, instead of buying your Starbucks coffee every day on your way to work, consider brewing your own coffee from home and putting the coffee money in a holiday spending jar. Forget about eating out every week and cook meals at home. Walk to your work if it’s doable or take public transportation. Avoid spending your money on clothes if you really don’t need them. While seemingly insignificant, all these little transactions can add up quickly and leave you with less money than expected when it comes time for gift shopping. By cutting out indulgences where you can and switching to a low-cost alternative, you can take the money you save and directly use it for holiday spending. The last thing you want to do is to dip into your rainy day or savings funds and use that emergency money for buying presents.
The holidays are a time for giving back and spending time with family, but they can also be the most expensive time of year. Start preparing your holiday budget today, so you can avoid a financial headache down the road. The key to a successful holiday lies within your spending budget. Start saving today, so you can look forward to the holidays without worrying about your finances.
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How a Holiday Budget Can Keep Your Spending on Track originally appeared on usnews.com
