Tips for Sticking to Your Holiday Budget
With goodwill in your heart and the spirit of the season surrounding you, it can be easy to overspend on holiday gifts. In fact new reports from the National Retail Foundation indicate that the average person is expected to spend $463 on gifts for family members this year and $805 in gifts overall. While shopping for your loved ones and delighting them with presents can feel wonderful, opening that January credit card statement doesn’t usually feel as great.
Since going over budget is practically an American holiday tradition, WiseBread recently highlighted some pitfalls to watch out for if you’re looking to break the habit. One of the biggest reasons people spend more than they intend to for the holidays is that they’re trying to match the perceived value of the gifts they’re being given. No one wants to look cheap to friends or family members, but don’t let that bad feeling ruin your finances. Regardless of what you receive or have received in the past, let your budget, not your guilt, guide you.
As part of your holiday budgeting you should create a list of everyone you will need to buy for ahead of time. Be aware that as the big day approaches you may feel tempted to add to that list. While a few dollars here or there might not seem like much, it can add up very quickly. Therefore it’s best to stick to your list and avoid any last minute additions.
If you’re like many Americans you probably receive some type of holiday bonus from your place of employment. Some companies have very structured methods for calculating these bonuses while others depend greatly on the success of the business that year. For that reason you should not count on your bonus to cover your holiday spending. The best part of this plan is if you do end up receiving a nice bonus, you can use it to invest or put it into long term savings.
Another important thing to consider when setting your holiday budget is the many other expenses associated with the season. One big example is travel. Whether you’re driving or flying home for the holidays, those costs are often significant and should be properly accounted for. Additionally if you work an hourly job, you may be taking extra time off that might not be paid. Kicking off 2016 with disappointing paychecks can be a rough way to start your financial year, so you should plan for them well ahead of time and look into using any paid time off you may have accrued to make up for the lost hours.
In many ways what is supposed to be a joyous time can end up being one of the most stressful for the majority of us. When it comes to holiday shopping, make sure you have a game plan in place to protect yourself from financial failure. By creating and sticking to a disciplined holiday budget, you can help make sure you have a happy new year.