You’ve done everything right so far. Rather than let the holidays sneak up on you without a plan, you took time earlier in the year to create a holiday spending budget. While many only account for gifts, you’ve also accounted for other categories like holiday travel, décor, charitable donations, and activities. Your goal is to avoid financial stress this holiday season, unlike last year when you made some impulse purchases of Packers and Badgers memorabilia – for yourself!
To execute this year’s holiday spending plan and achieve your goal, you need to:
- Save on purchases
- Track your purchases
- Manage your purchases (don’t overspend)
Smart strategies for saving money during the holidays
A smart way to save money is by using coupons and promotional codes. Many retailers offer exclusive discounts in November and December. Before committing to the purchase, look online for applicable coupons and promotional codes to apply at checkout.
Shopping during sales is also smart. Keep your eyes out for Black Friday, Cyber Monday, and Small Business Saturday sales, which usually offer the biggest discounts of the holiday season.
DIY gift ideas and cost-effective holiday activities are budget-friendly while adding a personal touch a big box retailer can’t match. Depending on your skill set, consider making homemade gifts like baked goods, crafts, or personalized photo albums. Additionally, look for cost-effective activities like visiting local light displays, organizing a family game night, or hosting a potluck-style gathering where everyone brings a casserole (or “hot dish,” to appease your Minnesota relatives).
Tracking your holiday expenses
Using budgeting apps like Mint Mobile or EveryDollar will help track your spending. These tools allow you to input and categorize expenses, making it easy to see where your money is going. You can even set spending limits for various categories to stay on track.
Google Sheets and Microsoft Excel also offer customizable templates and make it easy to track expenses.
Regularly reviewing expenses is a way to set up and keep guardrails on your holiday spending. Set aside time once a week to review spending and find areas to cut back on.
Flexibility is key to sticking to your holiday budget. Unexpected expenses may arise (a Packers Cheesehead hat for yourself doesn’t count), so be prepared to adjust your budget. If you overspend in one category, look for areas to cut back and balance things out.
Managing holiday debt and avoiding overspending
The holiday season is a time for joy, but it can also bring self-inflicted financial stress. To stick to your holiday budget and avoid unnecessary debt, here are some helpful tips:
Avoid impulse purchases and stay within your budget
- Make a list: Before shopping, create a detailed list of gifts and a budget for each. Stick to this list and don’t let your eyes wander.
- Compare prices: Research prices online or in-store to find the best deals. Look for discounts, coupons, and sales to stretch your budget further.
Manage credit card use
- Set a credit card limit: Figure out a reasonable spending limit for your credit card and avoid exceeding it. Even the most frugal consumer can succumb to a shopper’s high if they’re not careful. Don’t let the thrill of the hunt cloud your judgement.
- Pay off balances in full: If you use your credit card for holiday purchases, pay off balances in full each month to avoid high-interest debt.
Dealing with post-holiday debt and creating a repayment plan
Let’s say things didn’t go quite according to plan. Maybe a cousin, niece, or nephew (or all the above) had to be added to your shopping list. Or your travel plans changed – you had to make the five–hour drive to your parents’ place in Eagle River, rather than them heading south to stay with you. Things happen.
Here’s what you can do to get back on track in the new year:
- Assess your debt: Add up the total amount of post-holiday debt to create a realistic repayment plan.
- Prioritize high-interest debt: Pay off debts with the highest interest rates first to save money on interest charges.
- Create a budget: Make a monthly budget that includes debt repayments. Allocate a part of your income towards paying off holiday debt until the balance is zero.
Smart spending should be practiced all year long, not just around the holidays. Rural Mutual Insurance offers competitive pricing, provides individualized service, and only does business in Wisconsin. Connect with a local agent today.
