What’s one thing that people do not want to experience during the Christmas season? Stress! The current commercial buildup to the festive season is so intense that some people get more stressed the closer it gets. The holiday should be about family, friends and thankfulness. Instead it is often one big sales pitch.
Maybe it is the season to start trimming your budget and not just your tree. Canadian Living magazine reported that the average adult plans to spend $766 on holiday gifts in 2016. That’s a huge chunk of change. About 27 percent will spend over $800, while 23 percent will spend $200 or less. This is indicative of the changing public mindset of spending. Consumers with big eyes are now wary of a volatile economy and consequently putting too much of the holiday season on plastic. This means more restricted budgets.
By saving and spending wisely, your holiday season doesn’t have to be a total budget-buster. Try trimming your expenditures without sacrificing any of the holiday experience. Before you hit the mall or organize a big party, it can help to have a comprehensive plan in place so you know exactly where your money is going this holiday season – that way, you can ring in the new year with celebration rather than panic. Here are several ways to keep your spending under control this December.
Make a Budget
There are a couple different ways to set a holiday budget. You might want to establish a general spending cap, or try allocating a specific amount to each person on your gift list. Be aware, though, that while making a holiday budget is great, it can go sour in one of two ways:
Budgeting Too Tight. While setting a tight budget always starts with good intentions, an unrealistic one can do more harm than good. Without a little wiggle room for last-minute purchases or enough cash allocated a last minute gift, you can end up very frustrated. In fact, you might get so frustrated that you just toss your budget out the window. To prevent this from happening, look over your numbers. Do you need to spend $50 on wine? Can you cut back and allocate more money to gifts instead? Don’t just pick numbers out of thin air. Think things over to ensure that you make the right decisions.
Forgetting Little Things. Gift giving is a huge expense during the holidays, but don’t forget the other costs you incur throughout the season. Parties, travel expenses, charitable donations, and holiday activities can all add up to destroy a budget. If possible, add some money into your budget for unexpected costs so you’re not left scratching your head.
The way you create your budget is up to you, but one thing’s for sure: you need one. Create yours now before the season hits full steam and revisit it often to make sure you’re spending within your means.
Track Your Spending
Your budget does no good if you don’t effectively track your spending. One idea is to keep a separate Christmas fund in a dedicated bank account. This makes it easier to separate holiday spending from regular expenses. Have your bank app on your phone to allow you to check your balance and track your spending anytime and anywhere (even in line for the cashier).
If you’re an analytic (my hand is up), spreadsheets are also an excellent and accurate way to track your holiday expenditures. By establishing a budget and entering your real expenses, you can easily keep yourself on track. Just be sure to remain diligent. If you can track your expenses in real-time, your much more effective than if the receipts are lying around for days before you enter them in into your system.
Cut Back on Extras
Is this you? Getting lattes, trying on clothes, buying tempting “wants” for yourself, paying for a photo with Santa? We’re all guilty of indulging a little more than we should simply because it’s the holiday season. However, you can get stuck in a trap where constant spending on “extras” eats into your budget.
Cutting back on those extras can have a big impact on your bottom line. For example, if you are at Starbucks 3 times per week throughout December, that’s easily $150 that you’ve spent on drinks. That money could have paid for a few Christmas gifts, enough gas for travel, or a generous donation to a charity of your choice. Before you splurge on a little treat or “extra” for yourself, be sure it’s needed and worth the price.
Take Care Around Sales
Holiday sales can be an epic opportunity to save money but be careful. Not all deals are created equal and some may not even be truly discounted, as some stores keep prices the same but simply mark items with a “sale” sign. Always comparison shop before you purchase an item during a sale. If you tend to fall victim to the festive atmosphere of a store and make unwise purchases, try shopping online. You can snag great deals and use coupon codes to get a lot more for your money.
Of course, you never save money by spending, no matter how significant the discount. Sales are great, but they don’t mean much if the money isn’t in your budget. If necessary, bring a printout of your budget so you can check your spending in real-time and avoid being swayed by a “great” deal.
Know When to Stop
When your list is finished and you’ve checked it twice, stop shopping. Know when you’re finished and avoid stopping by the mall “just to see what they have.” This can lead to making poorly planned purchases and blowing your budget.
People typically get the itch to shop a few days before Christmas. Scratch the itch by specifically waiting to shop for stocking stuffers until the last minute. That way, you’ll still operating within your budget and purchasing something you need while fulfilling the urge to be part of the holiday hustle and bustle. By planning purchases and stopping when you’re done, you can be spared the January holiday bill hangover.
Get a Head Start
The period right after the holidays is the perfect time to check over your budget and make plans for the new year. How did you do? Did you stay within budget? Were there places you could have cut back?
This is also the time to start planning a credit card payoff strategy if you used plastic to finance your festivities. In a perfect world, you wouldn’t have put anything on your credit card that you couldn’t pay off in a month, but if you went overboard, commit to a payment plan that eliminates your balances within the next three or four months.
If you’re savvy and have the storage, the days following Christmas are ideal for getting a jump-start on purchasing decor and wrapping goods for next year. Of course, that’s only if you’ve budgeted accordingly.
In traditional families, when you add up your siblings, children, grandchildren, in-laws, cousins, close friends, and favourite pets, buying for the “family” can become a huge expense not to mention a major drain on your schedule. Instead of buying for each member of the family or even pulling names out of a hat, try funneling your resources into a Secret Santa experience instead.
As an example of a Secret Santa experience, one of our local churches decorates a tree with ornaments. Each decoration has the specific Christmas wish of a child in need. Each individual family can choose as many ornaments as they can afford, some can buy for an entire family, while others can pick one or two ornaments to fit their budget. Some other ideas for charity during the holidays include the following:
· Toy and coat drives
· Volunteer work
· Baking treats for neighbours
· Assembling care packages
· Donating to charity
Not only can a Secret Santa experience help relieve some of the stress and financial burden of exchanging gifts with every member of my family, it can give you a chance to talk about the importance of service and giving during the holidays and to focus on someone less fortunate. Funneling what you would have spent on family gifts to those in need is a great way to give back, have a charitable experience with your loved ones, and relieve holiday stress.
Traditions are what make the holidays so special, but they can be a financial burden. If your traditions include holiday travel, paying for a special attraction, or surprising your kids with extravagant gifts, you might find yourself going significantly over budget in the name of family.
While traditions are important and admirable, they don’t have to be expensive to be memorable. In fact, you might find that your kids prefer the cheap stuff to the grander gestures. So many activities and traditions are inexpensive or even free. You just need to know where to look. By making cheaper events and traditions part of your celebration, you can save money without skimping on the festivities and memories. Teach your kids that traditions aren’t about what you spend, but the time you spend together.
Here are some favorite inexpensive activities:
· Touring neighborhood Christmas lights
· Watching a movie with hot chocolate at home
· Seeing Santa at the mall
· Making Christmas crafts
· Baking together
· Reading favorite Christmas stories
· Seeing a high school production, such as a play or choir performance
· Checking daily deals for discounts on local attractions
We all tend to host one of the Christmas family gatherings every year. While we love prepping, cooking, and having everyone together for Christmas, how expensive all the food, decor, and activities always are. Buying food for 30 people is seriously pricey. If we do not watch out, you can spend most of your Christmas budget on food and drink.
If you’re hosting an event, embrace the idea of potluck. Let everyone know you’re going to make the main dish, but that you’d appreciate help on sides, appetizers, desserts, and drinks. Simply send out an email a few weeks in advance asking everyone what they’d like to bring or letting everyone know what their assignments are to ensure you don’t end up with five vegetable trays and no dessert.
It’s all too easy to get caught up in the spending cycle during the holidays. Commercial marketing campaigns are geared toward making you open your wallet in the spirit of Christmas, so it’s hard not to fall prey. However, if you’ve got a plan in place and know how to stretch each holiday dollar, you don’t have to fear your bank account statement on December 26th. Cheaper entertainment, a focus on family, and a sensible spending plan put you firmly in the driver’s seat of your own sleigh. Staying ahead of the Christmas spending curve is a smart way of Keeping Life Current. Feeling the stress? Reach out and let us help sort it out. Contact Northern River Financial at 1.855.5NRIVER or info@NorthernRiverFinancial.ca.