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Prepping Your Budget for Holiday Spending

golden piggy banks wearing a santa hat in front of christmas tree branches and ornaments

The holidays are all about love, family, and showing your loved ones you care. However, it can quickly turn into an overwhelming and quite stressful experience. Suddenly, the focus can turn to the number of gifts purchased rather than the wonderful experiences and memories made. You don’t have to break the bank or go into debt to show the people in your life that you love them. Below are a few tips and tricks to help you prep your budget for the holiday season.

Establish a Budget

The first part of keeping a realistic budget during the holidays is to make a list of all of the holiday expenses. This is the time to be thorough, as there are many items that add up quickly. Below are a few things to keep in mind when building your budget.

Holiday Cards

Are you planning to send out holiday cards this year? Sending holiday cards has been an age-old tradition, but it can take a big chunk out of your holiday budget. Is this the year you skip it? Can you send a virtual card instead or perhaps call your close friends and family? Sending warm wishes doesn’t need to cost money because after all, it’s the thought that counts.

Make a Detailed List of Holiday Expenses

Making a list of where your money is likely to go during the holiday season can help you stay on track. Below are a few areas your money is likely to go during the festive season.

  1. Wrapping Paper. Creating beautifully wrapped presents doesn’t come cheap. Do you have a stash saved from years prior? Can you get wrapping paper for a discounted price? Being thoughtful about the coverings of your gifts can help you save for other expenses.
  2. Travel Costs. Take time to think about where you may be traveling over the holidays and add this to your budget. Can you pack lunches for the road rather than eat out? Do you have saved up airline miles you can use towards your trip?
  3. Holiday Meals. If you plan to host any holiday dinners, this can add up quickly. Perhaps do some research on the cost-benefit associated with catering vs. cooking and buying everything out of pocket. If you’re planning to eat out for any meals, be sure to plan for that as well.
  4. Hosting Expenses. Food aside, hosting can be expensive. From decorations, table linens, and dishes this can add up.
  5. Babysitting. If you have young children at home and plan on attending holiday gatherings, definitely include babysitting charges to your holiday budget.
  6. Host gifts. No one likes showing up to a party empty-handed. Be sure to plan for the bouquet of flowers, a bottle of wine, or chocolates you plan on bringing to a holiday event.

Keeping Your Budget in Check

Once you’ve made your list of holiday expenses, it’s important to go back over it and see what can be added or deleted. A great way to keep your budget realistic is to set a monetary limit for each person on your list. Additionally, there may be people on your list that you don’t necessarily need to include in your budget.

Save in Advance

Saving money is a supremely difficult task and it’s important to be patient with yourself. Perhaps set up an automatic transfer to your savings account. This can make it easier and out of your mind, so you begin to save money without even realizing it.

There are other places in your budget where you can save money for holiday spending. Look at your monthly income, and more importantly, look at where your money is going. Below are a few ideas of where to get started.

  1. Going Out to Eat. Are you going out for coffee every morning? Are you packing your lunch or going out every day? Try meal planning and bringing in your lunch. Treat yourself to a new coffee thermos and try bringing in coffee to work instead of going through the Drive-Thru.
  2. Streaming Services. In this current age, there is a streaming service for nearly everything. Take a look at any overlap or any streaming service you haven’t used in awhile and could live without.
  3. Personal Shopping. While some things are necessities to purchase, are there areas of your spending that are extraneous? Can you check out a book at the library instead of getting one at the store?

Curate an Experience or Give a Meaningful Gift

A meaningful gift or experience can speak volumes about how much you care. An expensive gift doesn’t need to be the answer. A night together, a card, a picture frame or a homemade gift can show all the love you feel for your family member or loved one.

Maybe this year, your loved ones, coworkers or friends might be willing to skip a gift exchange. It’s always a fun option to create an experience. Below are a few options to consider!

  1. Potluck Dinner. Everyone loves a good potluck! Guests can bring a favorite dish and enjoy delicious food and being together.
  2. Game Night. Board games and friends, always an amazing combination!
  3. Cookie Swap. This is such a fun excuse to eat a lot of scrumptious treats and get together with loved ones. Ask everyone to bake their favorite batch of cookies and bring them. As an added bonus, ask everyone to share their recipes!
  4. Book Exchange/Book Club. You can either pick a book to all read together and then discuss or invite friends to bring their favorite books over and swap with others!
  5. Movie Night. Movies, popcorn, and friends. Sometimes it’s the simple things that make the best evenings!

Shop Smart Online

Online shopping is very convenient, but it’s important to be safe while you shop from the comfort of your home. Make sure you have a connection that is secure. Avoid deals that seem “too good to be true.”

Be wary of the free shipping trap. Sometimes “free” shipping isn’t actually free. Many stores will ship items for free, but you have to get to a certain dollar amount. If your order total is much less than the minimum dollar amount to qualify for free shipping, it might be smarter and less expensive to pay for shipping.

Use Credit Cards to Your Advantage

A credit card typically comes with perks, and this can come in handy when it comes to holiday shopping. If you use a rewards credit card, you will gain points or cash back on all the purchases you make. When choosing the right credit card, it’s important to look for a few important things. Make sure the rewards do not expire. Also, it’s a great credit card if there are rewards with every purchase, not just in specific categories. Make sure there aren’t limits or caps on the number of points or rewards you can earn.

Of course, if you do decide to open a new credit card or use an existing one, make sure to add that into your budget. Credit cards can lead to massive debt, so be thoughtful when considering this option.

Take Care of Yourself

It is so important during the holidays and always to be kind to yourself. Your family members and loved ones will appreciate whatever gift you give them no matter how big or small. Showing you care during the holidays doesn’t have to mean emptying your bank account and stressing about money. It’s all about the love, experiences, and memories you create.

If you’re interested in creating a holiday budget, talking with a financial advisor, or anything else related to holiday spending, reach out to your Highlands Community Bank banker!

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