If you’re someone who prefers to financially strategize and get ready for big expenditures, it’s an excellent time to begin organizing for the upcoming holiday season. The magnitude of your spending might differ based on your purchasing requirements and who you’ll be offering gifts this year. Nevertheless, it’s always a smart approach to brace yourself for potential increased expenditure in the months to follow rather than assuring yourself everything will stay within your budget.
The key to effortless financial planning for the festive season is maintaining a systematic approach. To help, here’s a pre-holiday financial guideline to contemplate while mapping out your spending.
Step 1: Outline all prospective expenditures
Begin with identifying potential extra costs you might incur during the holiday period. Are you hosting or attending any festive celebrations? Or possibly participating in traditional trips that might require additional budget? Who’s on your gift list? Will there be any philanthropic donations? Ponder over these questions and form a catalogue of likely expenses to plan accordingly for them.
Step 2: Identify your savings target
Once you’ve envisioned your expenditures, it’s time to decide on the savings you need to accumulate. Setting aside funds for the holidays is crucial to stave off debt and overspending. Regular transfers from your checking to a savings account can be set up. You can categorize your savings, for instance, “gifts for kids,” “presents for parents,” “festive feast,” and so forth. Online banks like Capital One 360 can be useful in managing these with options for numerous savings accounts that can be labeled as preferred.
This year, my festive savings look like this:
– Christmas Presents (for my husband, son and me): $400
– Family Secret Santa: $40
– Presents for parents and in-laws: $80 ($20 for each)
– Christmas meal: $45
– Winter Wonderfest: $50
– Other holiday-outings: $40
– Donations: $30
– Miscellaneous: $25
– Total: $710
Bear in mind, your savings list might differ if you’re planning on holiday travel or depending on your unique responsibilities or predilections. It’s okay if the calculated total seems daunting. You can always tweak it as needed. Realizing $700 may not be a cakewalk for us, but early savings will ease the burden.
Be better prepared for holiday shopping with this practical budget breakdown.
STEP 3: Reduce some of your expenditures
With higher spending anticipated during the holidays, start lowering expenses now to make room for savings. It’s relatively easier to be economical in fall, finding cost-effective alternatives that grant your finances some breather. Another strategy I use to curb expenses is making additional payments towards my debt prior to the festive season. This gives a sense of relief, knowing I’m ahead in payments and wouldn’t receive a penalty if I skip a payment in December due to unforeseen end-of-year expenses.
Step 4: Find additional income sources
If your holiday budget requires a boost, consider taking up side gigs for some extra cash. My husband recently started driving with Uber, intending to dedicate part of this income towards holiday expenditures. Seasonal jobs at local stores are also an option considering the increase in business during the holidays. Work from home opportunities like freelancing, babysitting, or selling unused items from your home have potential too. If you are creatively inclined, you could even set up an Etsy store and sell handmade products as holiday gifts.
Step 5: Redeem loyalty rewards and credit card bonuses
If you’ve earned any loyalty rewards, credit card points or cash back, consider redeeming these to fund your holiday expenses. These can be incredibly helpful if you’re planning holiday travel or purchasing gift cards for others. Last year, I saved some gift cards to offset my Christmas expenses. With around $200 in gift cards, I only need to raise $500 to meet the remainder of my holiday budget.
EARLY START
As mentioned earlier, this is the ideal time to begin readying your finances for the holiday festivities. An early start aids in systematic planning and fending off unwanted holiday debt. No one welcomes the new year burdened by remorse over excessive spending and debt due to impulse purchases.
Employ this festive budget guideline to navigate the most expensive months of the year smartly.
Have you taken the first steps towards your holiday financial preparation yet?
