Planning and Budgeting for the Season of Spending
As seen on The Rhode Show
It’s the most wonderful time of the year…and, often the most expensive. With the holiday shopping season in full swing, and with it, the big shopping days like Black Friday, Small Business Saturday, and Cyber Monday, be smart about your spending and create a plan of action that leaves no detail overlooked.
Here are five strategies to consider as you enter the holiday shopping season…
Set limits at the start. A good rule of thumb is to start by setting a spending limit proportionate to what can safely come out of your bank account without setting you back. If you don’t find much left beyond bills and normal spending, look closely at your statements and pick out items and regular expenses you can temporarily scale back on – using that money for gifts instead.
- Say you spend $3 on a coffee each morning. This month, consider making coffee at home and you’ll have $60 extra dollars to put towards your holiday budget.
Make a list and check it twice. If you have more than five people to shop for, look closely at your list and select only 4-5 of the most important people in your life to buy gifts for. For the rest, bake cookies or offer some other inexpensive but heartfelt gift or gesture.
Include EVERYTHING in your holiday budget. You should have a clear budget on how much you’re spending on who, and include little expenses that often go overlooked, such as;
- Postage: Mailing gifts and Christmas cards of your dog can add up fast.
- Stocking Stuffers: Little items seem inconsequential but can add up quickly.
- Food Expenses: Are you entertaining? Factor in your grocery budget for holiday dinners or parties you are hosting. Think a cookie swap can save money? Remember to include the cost of ingredients and your time commitment. Also include the potential for more frequent dining out around the holidays.
- Holiday Tipping: Don’t forget a little something for those who provide a regular service to you throughout the year.
- Small Gifts: Factor in the cost of numerous smaller gifts for coworkers, the kids’ teachers and party hosts.
- Charitable Contributions: Remember to include charitable gifts you like to make at year-end.
- Gas and Travel Expenses: Travel can become pricey, whether flying or driving, so plan ahead and budget before hitting the road for the holidays.
Avoid the last-minute scramble. If you wait until last minute to do your shopping, prepare to blow your budget. Most people who overspend on gifts do so because they find themselves scrambling last minute, unable to plan thoughtful and price conscientious gifts.
Minimize debt. Remember, the holidays end on New Year’s, and your spending should end then as well. Use saving and planning shortcuts like these before caving and racking up unnecessary credit card debt.