These five tips will help you avoid blowing your budget or ending up in debt because of the holidays.
The holiday season should be an enjoyable time to count your blessings and celebrate with those you love. Unfortunately, for many Americans, it’s become a season of budget busting – or even taking on debt.
The good news is, you don’t have to go overboard on the festivities in a way that compromises your financial security. In fact, there are plenty of ways you can limit the amount you spend during the holiday season while still having a great time. To help you out, here are a few key tips.
1. Set a holiday budget so you’ll know how much to spend
You can’t limit spending to a reasonable level unless you know what amount of spending is reasonable for you. So set a budget for all of your holiday extravagances at the start of the season.
You may decide on one big limit for everything related to the holidays – including travel, gifts, and entertaining – or establish separate limits for different categories of holiday spending.
2. Limit who you’re buying gifts for
With adult family and friends, you may decide to do a secret Santa instead of everyone exchanging presents. While you may love buying for each other, many adults don’t actually need very much, and everyone would probably be better off saving the cash.
3. Set price limits on presents
If you have people you want or need to exchange gifts with, see if you can set up a limit on how much you’ll each spend. Capping the price of presents means you won’t feel the need to go overboard and blow your budget. And it can force you to be more creative to find something the recipient will love that’s within your agreed-upon limit.
4. Look for homemade or free alternatives to expensive gifts
Sometimes, the best gift you can give is the gift of time – and that won’t cost you anything. Instead of buying expensive presents, for example, offer to babysit for a harried new mom or watch your friend’s dog the next time she goes on vacation. Giving of yourself can be much more generous than just buying another item, and your friends and family may be touched by your personalized approach.
If you’re creative, also consider a homemade gift instead of a store-bought one. Crochet, knit, or cross-stitch something, bake some delicious gourmet treats, or turn to your other talents to make something special and one-of-a-kind for the people in your life.
5. Host holiday events on a budget
If you tend to blow your budget on throwing an expensive holiday party or going out to lots of costly dinners with loved ones, look for ways to limit what you’re spending on these outings. You could suggest a pot-luck dinner at home instead of a big restaurant event, for example, or throw an afternoon cocktail party with hors d’oeuvres instead of a more expensive sit-down dinner.
Enjoying the holiday season doesn’t require you to spend every last dime in your bank account. In fact, you may find that you’ll like the festive season a lot more if you follow these tips and don’t worry about the impact overspending or holiday debt will have on your finances for months or years to come.