Holiday spending is here and Christmas is just a few weeks away. There is no doubt that you would start walking past Christmas decorated homes in your neighborhood. As you walk around the mall, shops are already putting up their own decorations as well. Even in your office, desks are starting to fill up with some holiday decorations.
Whether you like it or not, this is a season of spending. More than spending for yourself, you will also find that you are spending money on people that you love. AOL even shares that American consumers are going to spend an estimated $967 for this holiday season. This can be a significant setback if you are not prepared for it.
Financial management will play a big part in your holiday spending. You need to ensure that you do not blow off months of hard work because of a single holiday. Not only will you be putting your finances in peril, you will be having a more challenging start to the coming new year. The last thing you need is to create financial problems towards the end of the year.
If you want to prepare your budget and finances for the impending cost the holiday season will bring, here are a few things to look into.
Have a holiday list
As soon as you talk about holiday spending, it is important that you have a holiday list. Having one can help you manage your spending for the holidays a little better. As you put together a list, include the names of the people you want to give gifts to. Start with the names of close family and friends. Include co-workers and other acquaintances.
Once you have the names listed down, you add the amount you are willing to spend each person. It follows that the closer the person is to you, the more you would be willing to spend. Take your husband or wife, kids, and even parents for example. You would be more willing to spend more for them compared to co-workers and75r others. It would also be nice if you can put the things you know they will love to get.
As you complete your list, you have to total the amount. This gives you an approximation of how much you need for gifts. It will serve as a guide as well as you try and buy the gifts. Holiday spending is a lot easier when you financially plan for it ahead of time. You save money as you follow your list rather than picking out more expensive ones. You also save time because you already know what you need to get.
Take a look at your budget
Once you have your list down especially the cost, it is time to look at your budget. It can be your regular one or if you prepared early a holiday budget. When it comes to special occasions, it is best to separate the cost of your regular household spending. For one, it would not disrupt your regular accounting of expenses. It assures you that you get to meet all your regular payments every month. This is important as Forbes shares that most Americans cannot even face a $500-worth of emergency.
Another advantage of a separate holiday budget is you get to track your expenses better. As you list down the names of people you want to give gifts to, you do not go over budget. There is a tendency that once you start with your holiday spending buying gifts for people, you sneak in a few unnecessary expenses. This is why your budget is an important tool in managing and protecting your finances during the holiday season.
Try to lower down expenses
As the holiday season is just around the corner, you might want to free up some expenses in your budget. This will help you allocate these savings and put it on your holiday spending. Try to remember that this is just for the month. However, once you see the results, you can choose to extend it to the start of the year.
Some of the things you choose to do to lower your expenses is to target your discretionary spending. These are the expenses you make outside of your needs. It can be that dress you buy every week or eating out with friends every other day. You can even choose to give up your daily signature latte for a few days.
There are also line items in your household budget which you can take out. For one, take a look at your subscriptions and assess if you need all of them. Do you still need that magazine coming in every month? Do you need multiple kinds of music streaming accounts? Can you stream movies and programs rather than paying a lot for cable subscription? These are some of the expenses that you can let go. Once you do, you will not only have extra funds for the month but also, strengthen your finances for the coming year.
Look for a way to add extra income
As you try and lower down your expenses, it is a good idea to try and complement this by adding income streams to your budget. There are a few things to consider when you are trying to increase your monthly income. One of the most common options most people do is taking on a second job. These are usually the ones you can do after office or on your day-offs and where you can earn a lot of tips.
Another way you can pull in more cash for your holiday spending is to tap into your hobbies. If you know how to bake, you can sell them to family and friends. If you are a talented designer, you can pick up some online jobs. If you love taking photos and you have the modest equipment, you can offer your services for weekend events in your area.
This could also be a good time to cash up on things that you are no longer using around the house. Go down the basement or look up your attic to get things that have no use for you anymore. You can choose to hold a garage sale so you do not have to go far. You can also simply take photos of the items you are selling, put a price tag and sell them online.
List down financial goals for next year
An effective way to help curb an excessive spending for Christmas is to list down financial targets for next year. Doing so can make you stop and think before making unnecessary expenses this holiday season. It can be reviewing your tax and insurance strategies, saving up for a downpayment for a house, or even for a nice vacation.
Holiday spending can really do a number on your finances if you let it go out of hand. Christmas is better spent without the additional stress. Enjoy the holiday with family and friends without putting your budget in peril. Guard your spending closely and make sure that you do not spend the holidays worrying about the coming credit card statement or your month-end account balance. There are ways to enjoy the holidays without putting yourself in the red.