How do I Set a Holiday Budget and Stick to it?
How to Make a Holiday Budget & Stick To It!
The winter holidays, especially Christmas, should be a time of great joy for us all, but many times it is easy to become depressed or worried because the holidays have become synonymous with overspending and debt. Here are some ways to set a holiday budget and stick to it, avoiding the stress of overspending and enjoying your holidays:
Set strict and clear priorities about those you want to purchase presents for. Holiday spending can often get out of control because we feel we have to purchase gifts for every person we know, from coworkers to casual friends. Do not give into the pressure of buying gifts for everyone you know.
Set Your Holiday Budget
Be honest with yourself about how much you can comfortably spend.
Cross-reference your budget with a list of people to whom you want to give gifts. Some people may receive more than one gift, like your children or spouse, so determine how much you want to spend per person.
Leave Credit Cards at Home
Do not shop with your credit cards in your wallet. Instead, withdraw from your bank in cash the amount you have budgeted to spend, or, if you are very disciplined, use a debit card so that the amount of money you spend comes immediately out of your checking account, making every penny you spend instantly accountable.
Allocate Your Budget in Cash
Some find it helpful to get envelopes and write the gift recipients names on them, putting inside each envelope the amount of money you allotted for that person. That way you can keep a strict mental accounting of how much you have to spend and are less tempted to spend more on any one person than you budgeted.
Plan Ahead and Shop on Sale
Plan ahead and shop by sales. Many swear by after-Thanksgiving sales, the so-called Black Friday of holiday shopping when retailers lure shoppers in with deep discounts. However, be aware that many of the sale items promoted in sales for after-Thanksgiving are “loss-leaders,” with a very limited number of items discounted. It is very easy once you have waited in line to purchase a sale item only to learn it is sold-out to purchase a more expensive item out of fatigue or frustration. Have alternative gifts in mind if you cannot get the item you wanted on sale.
Be honest about your goals for holiday spending. Let family members know you are shopping on a budget. You may find your other relatives are relieved that someone finally decided to put some structure in the holiday spending. Some families may suggest a gift wheel or pulling names from a hat, ensuring that large-extended families do not have to buy a gift for every cousin and in-law. Being open about your shopping plans with others may be the best way to avoid breaking your holiday budget.
Holiday Budgeting Apps
Finally, if you find yourself wanting to pull out your credit cards this holiday season, one of the best tools to stick to your budget is a holiday spending calculator. Upload an app for one of these to your cell phone and use it every time you feel like going over budget. These calculators allow you to enter a card’s interest rate and minimum payment, as well the amount of the item you want to purchase. The calculator will then show you how many payments it will take to pay off all those impulse buys. Seeing the long time it can take to pay off credit card debt is a sure way to stay on budget.
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