It is that time of the year again when you might need a holiday budget once again. The question now is if you are ready for it.
One thing that makes it difficult is the fact that a lot are still trying to recover from the negative effects of the pandemic. Although the economy seems to have already opened up again with businesses back in pre-pandemic operations, personal finance is still a big challenge for a lot of people. And inflation is not helping as well.
According to CNBC, the Federal Reserve increased the interest again by 0.75% recently to combat inflation. In turn, this will discourage spending and reduce inflation on services and goods. However, this normally ends up with Americans carrying bigger monthly debt. As the holiday season approaches, Americans will again deal with holiday expenses.
As much as the holidays are supposed to bring good tidings and cheer to most people, the same cannot be said about their finances. There are a good number of people who are still trying to bounce back from the pandemic. Not only did it put a heavy strain on the health system, but that crisis also dealt a big blow to people’s finances.
Plenty of American workers had to endure months of being on furlough or worst, unemployed during the pandemic. Now that things are starting to get back to normal and with the year about to end, Christmas holiday spending will again do a number on your finances. It is a good idea to keep an eye out for tips to help your holiday budget be more manageable.
Start shopping early
You might think that shopping early runs contrary to what most people are doing which is buying close to Christmas day. That is when stores and other brands would come out with holiday sales and promotions. So why is it a good idea to get started with buying and spending for the Christmas holidays early?
One advantage this has is the fact that you get to spread your expenses over a longer period. This gives you the chance to spread out your expenses as well. And there are some stores and brands that do give out sales even before the holidays. You just have to keep an eye out for these sales as soon as they come out.
One advantage that shopping early does for your holiday budget is that you do not feel rushed in buying expensive gifts. You have time to look around and compare what you want to buy from different sellers. If you are buying online, you might not have to pay extra for rush delivery because you have enough lead time for normal delivery.
Use one credit card for all your holiday shopping
You need to stay on top of your holiday budget and using one credit card for all your holiday expenses can help. It would be a lot better if you can use a card that gives you rewards for using the card. It can be cash rebates or even points. You can then use these to help you pay for some items you need to buy or get cash back.
Another benefit to this is the fact that you get a statement at the end of the month. This lists down all the expenses or charges you made on the card. It helps you have a clear overview of all the expenses you made for your holiday spending. You get to check each item and identify if you are still within budget or if you need to slow down on buying gifts.
Identity theft is still rampant and using your credit card’s statement helps you get ahead of potential problems. You can see if there are any questionable purchases made on your card. If you do, reach out to your bank right away and inquire about it. This will be a bigger problem if left unchecked leading into the Christmas holidays.
Realign your expenses
As you try to watch out for your holiday budget, one thing that can help is taking a closer look at your expenses. This is true especially if you are trying to make do with a limited budget over the holidays. Revisiting your budget and identifying ways to realign your expenses can help you free up some extra money to help you spend for the Christmas holidays.
One area to look at is your discretionary expenses. These can drastically help you beef up your holiday expenses if you can even realign them for the holidays. Even if Retail Dive expects holiday sales to slow down this season, you are still in for some additional expenses in the coming months. It can still put some pressure on your household budget.
Look at what you can give up for a few months and reallocate those funds for Christmas expenses. It could be your monthly movie night, dinner date, or the money you set aside for your hobbies. You can pick it back up again after the holidays.
Find out what they want
A big portion of your holiday budget is spent on buying gifts for people that matter to you. More than just creating a gift-buying list, it also helps to know what they want. You could be planning to buy them something expensive when they are just looking for a relatively inexpensive gift. There will be times as well when the reverse happens – you buy a cheap one when they want something a bit more expensive.
The first thing is finding out what they want. You can ask around or you can ask them directly. There are times when you know the person, you already have a good idea of what they want. If it is over budget, you have enough time to look for a good deal. You might even be able to work with other friends and family to pool in for a gift for someone you both know.
Using your talents to give gifts
There are times when your holiday expenses can get a big boost from your talents and hobbies. This is because you can customize the gifts you can give out. If you love to bake and have a talent for it, you can bake cookies and send them out as gifts. If you love to paint or create art, you can make personalized artwork as gifts for the holidays.
The goal is to save money and give out personalized gifts as well. Doing something you love also helps you manage your stress and even get better control of your mental health. This is also a good way of putting your talent out there. When people see what you can do, they might start to ask you about it or even tell their network about it. It now turns into an income-positive hobby and even helps you with your holiday expenses.
Your holiday budget for the year can be quite challenging because it was different the last few years. The health crisis in the past years changed even the dynamics of holidays ad how we spend for them and how we celebrate them. Now that the economy is starting to bounce back up, expenses might start to go up as we buy gifts and begin going to and organizing parties. You just need to be conscious about your expenses and make sure you start the new year without much financial burden.