01 Nov Five Ways to Be Smart About Holiday Spending
Your Thanksgiving menu may be all planned out, but what about your gift list? The holiday season is just around the corner along with gift-giving, elaborate dinner parties, and tickets for festive experiences. It’s easy for the expenses to pile up just as quickly as the memories. Before you get caught up in the whirlwind of the season and lose track of your budget, take a minute to sit down and create a strategy that will help you maximize the season and emerge from December debt-free. Here are a few smart strategies for giving to those you love (and yourself!).
Fit Giving into Your Budget, Not the Other Way Around
Don’t wait until you’ve purchased half of the things on your list to try to make it work with your budget! If you don’t have a gifting budget in place, now is the time to make one. Calculate how much you can comfortably spend on the holidays, and don’t forget to include increased grocery bills, travel expenses, decor, and higher electric bills if you intend to go all-out for your holiday light display. Want to get ahead for next year? Copy this year’s budget for 2024 and chip away at your savings goal all year long. You can even add 1/12 of the total to a high-yield savings account every month to make the most of your savings.
Make a List and Check it Twice
Create a list of everyone you want to give a gift to and how much of your budget you can allocate to each person. In a separate column, note gift ideas (another great reason to start planning earlier in the year!) and how much each potential gift costs. You can reallocate funds as needed and make sure everything fits within your budget.
Are any of your gift ideas out of your price range? Not to worry. Do a little research to see how many items on your list will be discounted for heavy sale days like Black Friday, Cyber Monday, or Small Business Saturday. If you’re able to see what the discounted price will be, make a note of it and recalculate whether or not your gift list is still over budget.
Some of the best gifts come from thinking outside of the (gift) box! Consider giving a gift card or funds, or going in on a group gift for higher-priced items. Do you have a knock-out cookie recipe or an artistic side? If you have the time, handmade gifts are an easy way to cut down on your budget and are especially great for co-workers and neighbors. The person who has everything might appreciate a donation made in their name. And of course, don’t underestimate the power of giving experiences! Maybe your adult kids desperately need a date night and could use free childcare and a restaurant gift card, or your friend would enjoy a trip to the spa or a museum. Sites like Groupon and LivingSocial often have discounted deals on experiences, and perusing their offerings can be a good way to get ideas while saving money.
Don’t Forget About Yourself!
The end of the year is the perfect time to make smart money moves, like padding your savings or taking care of any health issues. Make 401(k) contributions now to help reduce your taxes, and use up that FSA before you lose it! Are you planning to travel over the holidays? If your credit card has a good travel rewards program, buy your gifts (within budget) on credit to maximize your savings. If you’re buying gift cards for the people on your list, check with your credit card or local grocery store to see if there are any extra incentives for gift card purchases.
The season of giving doesn’t have to leave you feeling like you gave your last dime. With a little planning ahead, you can give meaningful gifts and make the most of the season without getting hit by a high-dollar reality check come January. And if you’re struggling to create or stick to a budget, your financial advisor is a great resource for easy tips to be smart about money and your future.