Don't let financial pitfalls of the holidays sneak up on you. Laura covers wise tips to make the season brighter, less expensive, and more memorable!
It seems like we start thinking and talking about the holidays a little earlier every year. It begins well before the Halloween candy and costumes appear and ends with a hangover on New Year’s Day.
The holidays are supposed to be filled with happiness and joy—but they can also wreck your finances if you’re not careful. It’s the most expensive time of year for most Americans, who racked up more than $1,000 in debt on average last year.
Besides overspending on gifts for family and friends, there are other financial pitfalls that can sneak up on us. I know what it’s like to get caught up in too much shopping and consumerism during the holidays.
To make the season brighter, less expensive, and more memorable, consider these eight tips.
8 Ways to Make the Holidays Less Expensive and More Memorable
- Create a holiday giving plan.
- Remember your values.
- Shop strategically.
- Avoid new retail cards.
- Don’t shop for yourself.
- Be creative.
- Maintain savings.
- Practice gratitude.
Here are the details on a variety of ways to financially survive and thrive during the holidays.
1. Create a holiday giving plan.
As early in the season as possible, start thinking about every gift you plan to give. Jot down family, friends, neighbors, co-workers, teachers, and service professionals you’d like to remember. Estimate a gift amount for one, even if you have no idea what to give him or her yet.
Add up your total estimated gift amount and see if it fits into your budget. If you still haven’t paid off last year’s holiday expenses, you definitely overspent—so be sure not to repeat that mistake again this year.
Also consider additional expenses such as travel, throwing a party, wrapping paper, cards, postage, decorations, or new party clothes. If the total is more than you can afford or want to pay, you might reduce the estimated gift amounts or shorten your gift list.
Next, put the list in order of importance. For instance, you might rank spending $50 on Mom as a higher priority than $30 for Great Uncle Norwood. You should buy the most important gifts first, so you aren’t tempted to overspend using a credit card if you drain your budget on low priority gifts.
To cut costs, you could buy less expensive items or make an economical batch of something homemade and from the heart, such as cookies or tree ornaments. It’s also nice to have extras of inexpensive, homemade gifts so you can reciprocate when someone gives you a gift that you didn’t expect to receive.
Why not start a separate savings account that’s just for the holidays? You can automatically deposit a small percentage of your paycheck each month throughout the year, so when the holidays roll around you’ll be sitting pretty with cash in the bank.
Bonus Tip from The Penny Hoarder
Here are three ways to make a little extra cash for the holidays. If you're looking for more ways to make money fast, check out The Penny Hoarder.
1. Take an online survey for a $5 gift card. Check out sites like Swagbucks for paid surveys and other bonuses.
2. Pet Sit for Your Neighbor. Use sites like Care.com, Facebook, or Craiglist to advertise your services to friends, family, and community members.
3. Share Your Amazon Purchase History. You'll get $3 a month on an e-gift card for sharing your purchase history with the ShopTracker app.
2. Remember your values.
The holidays are the perfect time to remember your values and financial goals. A great way to think about values is to imagine your life in five, 10, and 20 years from now. What do you need to accomplish between now and then to feel successful?
Maybe you want to be retired in 20 years, pay for a child’s education in the next 10 years, or be free of credit card debt within five years. Write down your goals and keep them close to you during the holidays to avoid making poor spending choices. You might tape them to your bathroom mirror, refrigerator, or car dashboard so you’re reminded of your goals and values every day.