Although the holidays are a season of joy and special events shared with loved ones, they can also be hectic times. Planning and hosting parties, buying and wrapping gifts, traveling – the list of extra tasks we take on during the holidays sometimes feels overwhelming.
The holidays are a season of joy, filled with special moments shared with loved ones, but they also come with their fair share of challenges.
From planning and hosting gatherings to shopping for and wrapping gifts, not to mention traveling and navigating crowded schedules, the list of extra tasks can quickly become overwhelming.
It’s no surprise that what should be the most wonderful time of the year often feels just as stressful as it is magical. Beyond the hustle and bustle, the financial pressures of the season can add another layer of anxiety.
Gifts, festive meals, decorations, and travel expenses can add up fast, leaving many to feel the sting in their budgets long after the holidays are over.
But here’s the good news: you don’t have to let financial stress steal your holiday spirit. With a little planning and foresight, you can enjoy a season full of joy and connection while keeping your finances on track.
In this article, we’re sharing four simple yet effective tips to help you celebrate the season without sacrificing financial peace of mind.
1. Set A Budget – And Stick To It
If you go into the holiday season without a plan, you could end up spending more than you intended. Creating a budget will make tracking your spending a much easier task.
When creating your holiday budget, make a list of all your expected expenses and then try to consider any additional costs you might incur. That lovely holiday hairstyle? An ugly Christmas sweater for your work party? Tickets to the Nutcracker ballet? Aside from actual gift purchases, you may have other costs for things like:
- Travel or commuting
- Increased grocery spending for special meals
- Higher utility bills with extra guests in the house
- Holiday decorations and party supplies
- Clothing, shoes, and accessories for holiday parties
- Salon visits
- Tickets and admission for special events and seasonal attractions
Determine an estimate for each item and set a spending limit for each. Once you’ve nailed down your budget, stick to it! It can be easy to let the rules slip in the name of holiday fun, but if you stay true to your plan, you’ll thank yourself later. After all, the real fun of the season is the time you spend with loved ones—not how much you spend on gifts.
2. Get Creative With Your Gift-giving
Don’t let the traditional idea of holiday gifts hold you back when it comes to purchasing presents this year. There are many unique ways to give to your loved ones that don’t involve buying something from a store. An out-of-the-box gift can be both budget-friendly and incredibly thoughtful. Stuck on creative options? Here are a few ideas:
- Volunteer together – Give back to your community and build memories with loved ones at the same time.
- Make something unique – If you have a creative skill or hobby, leverage it to gift something truly unique that can be cherished for years to come.
- Give experiences rather than items – Experiences create memories that will last much longer than even the hottest holiday toys. Go ice skating or sledding, spend a day baking or making holiday crafts, or contribute funds that would have been used for individual gifts toward a family vacation or outing.
- Contribute funds to a savings account or education savings plan – Help your children or grandchildren plan for the future by starting a savings account. Try a traditional savings account or maybe even an ESA or 529 Plan to save for future education expenses.
- Give to charity – Contribute to a charity that is meaningful to your loved one in their name. And bonus – this one’s tax deductible!
You can show your loved ones how much you care in ways that don’t have a huge impact on your budget. The options are endless when you get a little creative. A present doesn’t have to cost a lot to be valuable to the recipient. A unique and thoughtful gift will be appreciated, no matter what’s on the price tag.
3. Plan Ahead
Feeling rushed or like you’re running out of time is pretty common this time of year. If you’re not careful, panicking can lead to unexpected costs on everything from travel expenses to last-minute buying. When you’re feeling a time crunch, you might err on the side of convenience and end up spending more than you really wanted to. Consider the following forward-thinking actions to avoid the pitfalls of a last-minute holiday rush.
Set aside funds throughout the year
According to the National Retail Federation, the average household plans to spend around $875 on gifts, decorations, and other holiday-related items in 2023. Coming up with this amount in November and December may be doable, but could easily put extra pressure on your day-to-day finances. Take a look at your holiday spending this year to find a baseline for your total holiday spending, then consider setting aside money each month for the following year.
Plan travel and accommodations well in advance whenever possible
Although it’s fabled that last-minute flights can be cheaper, waiting until right before a trip to book a flight is best avoided when possible. Consider booking holiday flights up to 7 months in advance, and be mindful of the days and times you choose to travel. Early morning and mid-week flights are often cheaper because they’re less popular.
Shop sales throughout the year for the best deals
Although Black Friday sales are a great time to kick off your holiday shopping, it’s not the only good time to buy. Keeping your eye out for sales throughout the year can help you find deals and take the stress out of buying everything all at once. Retail markets go through predictable cycles each year; if you know what you’re looking for, you could snag that perfect gift for a great price!
It might seem a little strange to start thinking about the holidays months in advance, but this kind of behavior gives you a leg up when the seasonal hubbub rolls around. The sooner you start planning, the easier it will be to avoid unforeseen expenses that could eat into your budget.
4. Keep Your Overall Financial Goals In Mind
Giving lavishly during the holiday season can be a lot of fun, but taking a measured approach to your spending doesn’t necessarily make you a Scrooge! Keeping your overall financial goals in mind can help you focus on the reason for the season and avoid overspending.
Take some time to review your current goals as you gear up for the holidays. Is your holiday budget realistic? Can you spend what you want without negatively impacting your other financial goals?
Think about taking an honest look at your current financial plan to really get a feel for how your holiday spending could affect your goals. The end of the year is a great time for an annual financial checkup.
Periodically reviewing the status of your spending, savings, and retirement accounts can help you stay fiscally healthy—and maybe even give you the willpower to resist buying that one more gift that would put you over your holiday spending limit. Let your goals guide your spending instead of the moment, and in doing so give yourself the gift of financial peace this holiday season.
Better Habits For Peace Of Mind
The holidays are busy times and sometimes very stressful. Taking the time to plan well in advance can help you go into the season prepared and confident. Get creative with your gift-giving rather than overspending on the trendiest toys or overfilling stockings with quickly forgotten trinkets.
Set yourself up for success by setting a realistic budget that lets you enjoy the spirit of giving without impacting your other financial goals. Plan in advance when possible to make things easier (and probably cheaper). Finally, remember to enjoy yourself and the time you share with your loved ones. Here’s to a happy and fiscally responsible holiday!
Want more information on how to create a financial plan that balances your future goals with your current spending needs?
At Better Money Decisions, we believe you can lead your best financial life starting right now. Click here or call 844-507-0961 to schedule a free consultation with a member of our team today!
