According to the National Retail Federation, adults are expected to spend an average of $931.10 this holiday season. That’s a substantial amount of money for any budget, and it’s a big expense to bear for young professionals who are working toward big money goals like repaying student loans, saving for retirement, or building up an emergency fund.
With the festive spirit of the holidays, it’s easy to accidentally spend more than you expect. But to avoid some holiday shopping and spending regret come January, you need to safeguard your budget now.
Start by implementing the following five strategies to get you (and your budget) through this expensive season:
1. Consider All Your Holiday Expenses
The most important step in any budget is to plan ahead for the ways in which you plan to spend. Once you realize the full scope of your holiday spending, you can budget appropriately and minimize unexpected expenses.
When you sit down to prepare your holiday budget, consider the following expenses:
- Gifts for family, friends, and co-workers
- Greeting cards
- Party attire
- Social functions
Yes, self-gifting may need to be on your list. Studies show that 56% of us pick up something for ourselves while shopping for others. If that’s you, don’t resolve to abstain from personal shopping. Instead, be realistic and allocate a small amount of money to yourself and savor the gift you choose.
2. Create A Spending Strategy With Your Partner
Coming to a mutual decision with your partner about how you’d like to handle the holiday season will help ensure your budget success. Together, establish the total holiday budget, allocate the money, and determine the gift recipients.
Then, calculate a target spending amount for each loved one. This target number makes it much easier to determine if the gift you have in mind will fit into your overall spending plan.
Once the two of you establish a strategy, check in with each other regularly. Consider tracking holiday expenses with a running list and talking about it once a week.
With the fast pace of the holiday season, regular communication will ensure that you both stay accountable and allow you to adapt while still staying in budget.
3. Approach Your Extended Family About Taming Gift Spending
As families grow, gift spending can rise quickly. If you’re feeling overwhelmed by the amount of gifts you need to purchase for family members, propose an alternative gift arrangement.
Consider Secret Santa gifting. Draw names and buy gifts for one person. With less people to buy for, you can set a generous gift limit, buy a high quality present, and still save money.
Skip sibling gifts and buy just for the kids. If your family is expanding with multiple nieces and nephews, propose to your siblings that you all buy just for the kids.
Or propose a joint entertainment activity instead of exchanging presents. You’ll make a wonderful memory and still reduce your holiday spending — and studies have shown people value experiences more than things. Go for the lasting happiness by skipping the stuff and enjoying time spent together instead.
You can brainstorm your own alternative that works for your family if none of these makes sense for your situations and traditions. At the very least, if your family’s gift-giving has gotten competitive and excessive, you can suggest toning it down and putting a cap on spending for everyone.
If your extended family isn’t receptive to alternative gift giving, you can still set your own limits. You have to make the best decisions for yourself and your household.
4. Get A Great Deal — And Then Stop Shopping
Retailers know we love to spend during the holidays, and “deals” are everywhere. However, once you’ve found a great deal that fits within your budget, stop shopping!
You’re not saving money if you’re buying up things on sale that you never planned to purchase. Sure, being frugal and getting a deal is great. But nothing beats not spending that money, period.
Avoid temptation by unsubscribing from all emails that offer deals. If you don’t want to unsubscribe, change your email settings to send ads to a separate folder in your email inbox so you don’t constantly see them.
Throw out weekly paper ads as soon as you pick up the paper. If you don’t know what deals are out there, you won’t be as tempted to overspend.
5. Spread Out The Saving
It’s much easier to stay on budget when you’ve allocated enough money. However, it can be difficult to pay holiday expenses completely out of December’s paycheck. If you spread your holiday saving out over multiple months, you can save enough to celebrate the holidays comfortably.
Next year, begin saving in January with a line item in your monthly budget for holidays. Move funds into a separate savings account to use for holiday spending.
Even if you haven’t already saved for the holidays this year, make the most of the weeks we have left before gift-giving season really ramps up. Distributing your holiday spending over November and December will make the holiday season cash flow easier.
The holiday season is a joyful time of year. With a solid holiday spending strategy, you can get the most out of the season and still stick to your holiday budget.
What’s your best strategy for safeguarding your budget during the holidays?