The holiday season should bring joy and not financial stress. But every January, people wake up to a shocking credit card bill with purchases they can’t even remember. Now that we’re nearing the holidays, take some time to plan where your money will go. Yup, the money that will be spent on food, travel, gifts, and decorations. Don’t make the same mistake as last year, as we give you the 8 proven strategies of enjoying the holidays while being financially responsible.
8. Use Credit Cards Strategically (Not as Extra Money)
If you plan to purchase with a credit card, then use the one that will offer cash back and rewards. Now, if you take part in these reward programs, chances are your perks will pile up. However, use them responsibly in a way that you can pay off your balance immediately. But if you struggle with spending, you might as well use cash or debit cards for your holiday transactions.
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7. Start Saving for Next Year Now
To make your budgeting easier, consider opening a Christmas Club Savings Account by setting aside a little money each month. You can even build up your holiday fund for the next year, with some accounts offering dividends so your fund grows. Even as little as $50 a month starting in January will give you $600 for holiday savings.
6. Organize Gift Exchanges Instead of Buying for Everyone
Rather than exchanging gifts, suggest drawing names to limit the number of gifts exchanged or contribute to a group gift. You and those who get to join can pool holiday money to enjoy this experience. It can be in the form of Secret Santa or white elephant; get creative with the game. This reduces the number of gifts that each one has to buy while ensuring that everyone gets something. You can even suggest a spending limit for gift exchange that focuses on the quality rather than the quantity.
5. Shop Strategically and Avoid Impulse Purchases
Practice waiting 30 minutes before making a purchase. When you delay rewards, your brain decreases the response to an item. Create a list of presents you’ll get and shop early to take advantage of the sales. As much as possible, earn coupon codes and cashback offers. But when you spot an item you’d like that isn’t on your list, pause for at least 24 hours. This will allow you to think of what you genuinely want, or just your impulses talking.
4. Get Free Holiday Entertainment
We sometimes spend just so we can feel the Christmas spirit. Control yourself and just leverage on available free holiday entertainment near you. It could be taking a stroll around your neighborhood for Christmas decorations or joining in Christmas-themed markets downtown. There are also tree lighting ceremonies and Christmas movies to enjoy.
3. Host Potluck Gatherings Instead of Catering Everything
A gathering at your place would mean feeding an entire party. Instead, ask your friends and family to bring food for a holiday meal. This will cut the cost of grocery bills and be less stressful for you. Consider a potluck activity where everyone gets to bring a dish. Plan your contribution ahead of time to avoid last-minute, expensive purchases. Make sure that each one has coordinated their food to make a balanced variety.
2. Focus on Experiences Instead of Material Gifts
This holiday season, focus on collecting experiences rather than material things. If you have enough money for an out-of-town trip, then spend it with the family rather than buying something that you don’t need. This advice also goes to gift-giving, where you give your friends and family experiences. This could come in the form of cooking classes or maybe a coupon for an activity that you want them to experience.
1. Set a Realistic Budget (And Actually Stick to It)
Before buying anything, sit down and create a holiday budget for spending. Determine how much you can afford from your current financial situation. Next, break the budget into categories like gifts, food, travel, and entertainment, and decide how much you’re willing to spend on each. In the gift category, write down everyone you plan to gift and the amount you’re willing to spend beside each name.
