12 Tips to Save on Holiday Spending
For many, this ‘tis the season of unplanned overspending. While it is better to give, it’s even better to stay out of post-holiday debt. Instead of being spontaneous, shop with a real plan in place.
In the spirit of the 12 Day of Christmas, we offer 12 tips to save on holiday spending:
Make a List
The first step is straightforward. Simply make a list of all the family, friends, and co-workers for whom you’re considering buying a gift. Just by having all the names on one sheet of paper, you’ll likely get a better idea of what you’re dealing with.
Check the List Twice
The next step is simple too. But it’s one you may agonize over. Consider cutting down your list.
According to Forbes, you’re likely doing others a favor: “(Shoppers) all express fear of hurting people’s feelings, but what they don’t realize is that everyone is secretly wishing for the suggestion but no one is brave enough to make it. So, be the brave one in your family and circle of friends and opt for no gift exchange or limited gift exchanges, like Secret Santa or White Elephant exchanges to cut down costs.”
And don’t forget the time-honored tradition of frugal giving: holiday cookies. Baking is a thoughtful, yet inexpensive way to gift a co-worker.
Budget per Person
Once you’ve pared down your list, determine how much you plan to spend on each person. Then as each present is purchased, deduct the cost from that person’s budget.
Consider not only setting a budget for your children, but also letting them know about it. For instance, you may explain to your child that Santa gives everyone a $500 budget. If your child’s list comes in over budget, he or she will not get everything on their list. Not only will this keep your budget in check, but it’s also a great exercise in math for your child.
Establish Ground Rules
An alternative to setting a budget and sharing with your child: set up rules that keep spending in check. Forbes suggests the ‘Rule of Four’: “You only give someone four gifts and they fall into the categories of something you want, something you need, something to wear and something to read. This not only keeps budgets lower, but it also helps you give more practical items that can now count as gifts instead of additional costs down the road.”
Budget Based on Your Finances (Not Someone Else’s)
Maybe you have a single younger brother with a great job and few expenses. He loves to lavish his family members with the fanciest gifts. If you’re in a different place financially, do not feel compelled to follow his lead. Besides, a thoughtful gift is almost always more appreciated over an expensive one.
Ramp Down Spending Leading up to Shopping Season
As shopping season approaches, try to dial back on other purchases. For example, if you’re accustomed to a $4 cup of coffee on a daily basis, maybe you try to go without for a while. If you’re a coffee junkie and this sounds like blasphemy, consider other purchases that may be easier to sacrifice.
Better Yet, Budget the Entire Year
Believe it or not, there’s no law against budgeting for the holidays all year. For example, if you normally spend $2,400 annually for the holidays, then set up a separate savings account. You can set up automatic monthly transfers of $200. This saves you from a big end of year financial hit, as well as the stress associated with it.
Comparison Shop Online
We’re big believers in shopping local, but it also can’t hurt to check online for substantial savings. According to the National Endowment for Financial Education: “Consider online shopping to get the best deals, but be sure to figure in shipping costs.”
Use Cash Instead of Credit Cards
According to Forbes, multiple neurological studies have shown that when you swipe cards, your brain literally shuts down and doesn’t process the transaction, which is one reason why the card spending gets out of hand. Sticking with a cash diet during the holidays will make you more mindful of the money you’re spending and naturally keep you on budget.
Kiplinger suggests if you’re not comfortable with cash and carry, put the money on a prepaid card that charges no purchase, activation or maintenance fees.
An excellent option for this, the Bank of Southside Virginia offers pre-paid VISA gift cards. You’ll feel good about buying local, while giving the recipient the flexibility to purchase anywhere.
Give Gift Cards
If you’re searching for just the right gift, it’s easy to spend an extra $5 or $10 here and there. With gift cards, you’ll not only spend exactly what you intended, you also take the guesswork out of the equation.
Cut Back on Other Holiday Expenses
It’s not just the expense of gifts that add up in the holiday season. Things like fancy gift wrapping and elaborate holiday cards might add more cost than you realize. Consider simpler wrapping options and sending a letter instead of a card.
Less Indulging, More Volunteering
Holiday parties can be fun, no doubt. But they can also be expensive. There are costs not only for the party itself, but possibly a gift exchange as well.
Investopedia recommends group volunteering as an alternative: “Give them the relief of forgoing buying gifts for you by organizing a group volunteer day instead. You’ll get to spend quality time together – plus, you’ll come out of the day feeling proud of your efforts rather than suffering from buyer’s remorse, and anyone can benefit from volunteering.”
The Bottom Line
With a little planning leading into December, you can save unwelcome surprises in the New Year. Besides, in showing your love for family and friends, sentiment is more meaningful than a dollar amount.