The holiday season inspires us to take time to celebrate family and friends, to gather around great food, and exchange thoughtful gifts. But as much fun as the holidays can be, they can also be expensive. For some, the holiday season can turn from celebration to an anxiety-fest, especially if you wind up underwater financially when it’s over.
Tracking your holiday spending can help you keep your budget under control and give you peace of mind. Here are five ways to take charge of your holiday spending this year:
1. Set a Budget and Stick to it
Begin by creating categories for all the various types of spending you anticipate. For example, gifts, food and beverage, travel, special events or charitable donations, and set a limit for each of them. Add up the expected costs and figure out whether you need to trim any of them down to keep your budget on track. Work the numbers until you arrive at a reasonable spending limit you will be able to stick to.
2. Let Technology Do the Heavy Lifting
Using a money management tool, like the one on included in our very own Canopy online banking app, can help you set budgets and record spending so you can track your progress quickly and easily on your smartphone or computer. A money management tool lets you categorize costs, so that you can see how every purchase impacts your target budget’s bottom line.
3. Don’t be Impulsive
The holiday season is when many retailers make or break their annual sales goals. From gigantic sales to special events, attractive displays, and emotional holiday appeals, businesses are counting on you to spend more than you should. For most of us though, impulse buys can break budgets fast. It only takes a few spur-of-the-moment money decisions to push your spending over the edge.
Give yourself time to evaluate every purchase before making the decision to pull the trigger and you’ll avoid overspending and the eventual buyer’s remorse that often comes with buying things we should have left on the shelf.
4. Don’t Wait Until the Last Minute
You can find bargains all year round, so start your holiday shopping early. Tracking down discounts and great deals on gifts and travel can really pay off when the holidays arrive. Black Friday and Cyber Monday can potentially help you save big on in-demand items, so don’t forget to pay attention when they happen. But, don’t let all the hype trick you into making impulse buys you’ll regret later. Start early and keep your eyes open. By the time the holidays actually roll around your shopping may already be done.
5. Use Credit Cards Wisely
Having good credit that’s available when you need it can make life easier and more manageable. Credit cards can help you earn rewards for purchases you would have made anyway and can give you flexibility to pay off larger purchases over time. But used unwisely, they can also be dangerous. If you're worried or uncomfortable about going into debt with your holiday spending, it might be smart to set savings aside for the holidays whenever you deposit a paycheck. This can help you avoid racking up credit card debt and might even save you money if you’re dealing with retailers who offer discounts for cash.