PWC predicts that American shoppers will shell out $1,530 on holiday expenditures such as gifts, travel, and entertainment, marking a 7% increase from 2022. Around 40% of consumers are anticipated to spend more than they did previously. Given current financial pressures and escalating costs, the festive season can exert significant emotional and fiscal strains, making it challenging to maintain a solid budget, particularly if your loved ones don’t share your economic outlook or holiday spending approach.
If you’re fond of the holiday season like me and are eager to make the most out of it without fiscal strains, continue reading for seven tips to help you establish effective financial limits for a sound financial trajectory.
1. DETERMINE HOLIDAY SPENDING LIMITS
Before holiday shopping kicks off, plan a rigid budget within a range that is financially viable for you. Stay committed to spending only what you can afford. Avoid allocating funds meant for bills towards gift shopping. However, any extra cash you can set aside for holiday spending is a plus, as long as it doesn’t interfere with crucial expenses like rent.
2. CREATE A BUDGET-FRIENDLY GIFT LIST
It’s common to get swept up by the festive season and overspend. To stay within your budget, create a list of all the people you plan to give gifts to, and how much you plan to spend on each. The earlier you start your shopping, the less of a dent it will make on your wallet later on.
3. START EARLY AND LOOK OUT FOR SALES
Don’t wait for traditional sales seasons like Black Friday or Cyber Monday. With most retailers offering deals throughout the year, whether you are searching for cost-effective presents or additions to your festive wardrobe, these sales can offer good value on expensive items. Plus, it helps you avoid last-minute shopping stress.
4. COMPARE DEALS BEFORE PURCHASE
Take advantage of discounts, promotions, and sale events for your holiday purchases. There are also price comparison apps and websites to help get the best deals. Remember that best deals usually appear between Black Friday and Cyber Monday, so be prepared and do your price research in time.
5. THINK BEYOND CONVENTIONAL GIFTS
Instead of pricey gifts, consider more unique and affordable options like handmade presents, experiences, donations to charity, or even offering your time. A visit could be more valuable and appreciated by distant family members.
6. EMBRACE DIY FOR DECORATIONS AND WRAPPING
Avoid overspending on gift wraps, which Americans are reported to spend around $3.2 billion annually, research from Hallmark shows. It can be creative, fun, and a great money saver to make your own decorations and wrapping paper.
7. ADOPT A SUSTAINABLE APPROACH
Stay clear of cheap and less durable items; they tend to wear out faster, thus ending up costing you more. Opt for eco-friendly gifts or those that don’t need much wrapping. For instance, items made from recycled material, reusable items, or experiences such as tickets to concerts. Recycling is always a good idea, not forgetting that homemade baked goods are usually a hit.
CONCLUSION
Setting financial boundaries for the holidays is not just a proactive way to manage your finances, but also encourages a healthier and sustainable relationship with money, preventing overspending and subsequent debt. Doing this eliminates financial stress commonly associated with the festive season, as well as stopping the accumulation of debt related to impulsive purchases. Remember, without setting financial boundaries, you might hinder your progress towards achieving your financial goals.
