Holiday Cheer on a Budget: Tips to help manage your spending this holiday season
The holiday season is a time of joy, celebrating and gift giving. Given the festivities and pace of the season, it’s easy to get caught off guard in managing the expenses of it all.
According to the National Retail Foundation, Americans spend an average of $1,000 annually on gifts, food, decorations and other holiday-related purchases (Banzai, 2023). While you may want to spread the most holiday cheer, make sure you’re able to do so in an affordable way. Taking the time to create a budget you can stick to for what you plan to spend this holiday season can be super helpful in ensuring you can enjoy the festivities without straining your wallet.
Create realistic goals
Start by looking at what you spent last year and consider how it impacted you financially. For example, did you find yourself months later still paying off credit cards from those holiday expenses? A U.S. News & World Report survey says an estimated 4 in 10 people plan to go into debt to finance gifts and travel around the holidays (Banzai, 2023).
Take time to reflect on what matters most to you during this time. Is it hosting the big dinner, buying meaningful gifts for everyone or heading out of town to see family members? Whatever your priority, make sure you allocate your budget in a way that allows you to do what you want without going into debt.
Evaluate expenses and set spending limits
How many people do you tend to buy gifts for? How much do you anticipate spending on food, decorations or travel? Think about these things individually, add up what you plan to spend and determine whether or not that spending fits inside your budget.
On top of that, don’t forget about your normal budget. Keep in mind the things you already have to pay for on a regular basis so you’ll know how much disposable income you have to go toward holiday spending.
Categorize each spending area, set a limit and stick with it.
Just because you’ve spent money on something or someone in the past doesn’t mean you need to do it every year – especially if it busts the budget! Your friend from college who you send a gift basket to each year will understand.
Have open conversations with your friends and family and let them know you may need to opt out of traditional gift exchanges if you know it’ll be too much to financially bear.
Cash out rewards
If you use credit cards with reward points or cash back, the holidays are a great time to put those perks to use.
Some cards may offer rewards or cash back for spending at certain stores, categories or travel. If you plan on using credit cards this holiday season, consider taking advantage of benefits you have.
Creating a holiday budget is an invaluable way to maintain financial wellness during the festive season. If you’re tired of feeling the holiday pinch, start saving for the next holiday season now.
Remember, the true spirit of the holidays lies in the joy of giving and spending quality time with loved ones, not the price tag attached to it. Happy budgeting and happy holidays!
You can find resources like budget calculators, interactive modules, articles on saving for the holidays and more on AtlanticUnionBank.Banzai.org. Banzai is a financial education tool that offers clear, in-depth lessons to help you dive into financial topics you care most about.
Source: Banzai. Create a holiday budget. AtlanticUnionBank.Banzai.org/wellness/resources/create-a-holiday-budget.