Creating a Holiday Spending Plan
’Tis the season for hot chocolate, cozy nights under a blanket, traditions and spending — lots of spending.
In fact, in 2022 Americans spent $936.3 billion on holiday shopping. 2023 spending is projected to increase nearly 5% over that amount.
With the holidays just around the corner and inflation still high, it’s more important than ever to create a spending plan that you can stick to. So, it’s time to make your list. Now check it twice and keep scrolling down for holiday spending advice.
Ask and you shall receive
Ever opened a gift and silently thought to yourself, “I can’t regift this one fast enough?” I think we’ve all been there. But just because we’ve had it happen doesn’t mean we should take the jingle out of someone else’s bells.
If you’re spending money on things that people don’t want or need, then it’s not a good spend. Don’t be afraid to ask the people you’re buying for what they want, or more importantly, need. Most people are happy to give ideas that will both suit their liking and your budget.
Break it down
Give yourself an overall budget for holiday spending. Once you have that, make a list of each person you need to buy for and divide your total budget by the number of people to give you a spending limit per person.
If you find something on sale and spend less on one person, you can reallocate those funds to spend on someone else. If you go over budget on someone, don’t forget to adjust your limit elsewhere to make up for that splurge. Budgeting, including a holiday spending plan, is all about balance. If you tip the scale one way, you need to adjust the other to level it out.
Price it out
Before you buy a gift, make sure you’re getting the best price possible. Don’t be afraid to compare pricing at several merchants. Many stores even price match so if you find the item priced less at a competitor, they’ll drop theirs to earn your business. When shopping online, look for items with free shipping. Many times, the price seems great but when you add up the shipping and handling costs, you could spend more than you would have paid at the store.
Make it personal
Utilize your gifts for gifts. If you’re great with written words, write a little personalized story for all the kiddos on your list. Great at art? Paint or draw someone a piece they’ll remember forever. Gifts don’t always have to be bought; they can be made. Gifts from the heart will make an impression on the receiver and your holiday spending plan.
Prepare for next year
Set yourself up for a successful holiday spending season by saving all year long. Many financial institutions have special holiday savings accounts that earn more interest. Set up an automatic transfer each paycheck and feel the spirit rather than the stress of the season next year. Don’t wait until the end of the year to start.
Plus, great deals and sales happen all year long — be on the lookout and grab gifts throughout the year to further ease the stress of holiday spending.
As we approach the holiday season, creating a spending plan is essential. By asking for gift ideas, breaking down your budget, price matching and incorporating personal touches, you can balance spreading holiday cheer and managing your spending wisely.
Additionally, preparing for next year’s holiday season by saving and taking advantage of sales throughout the year, you can help alleviate additional stress associated with holiday spending. With careful planning, you can enjoy the festive season without breaking the bank, ensuring that the true spirit of the holidays shines through.
By Rachel Caballero | TruWest Credit Union
