Your Holiday Budget: 8 Tips for Smarter Spending

The holiday season is a time of joy, celebration, and, often, financial stress. With gifts to buy, parties to host, and travel plans to make, it’s easy to overspend.

Creating a holiday budget can help you manage your expenses and avoid financial strain. Here are eight practical tips to help you budget your holiday spending and keep your finances on track.

1. Make a list

Before you hit the malls (or your computer), start by making a comprehensive list of all the people you need to buy gifts for, events you plan to attend, and any other holiday-related expenses. This will give you a clear picture of what you need to budget for and help you avoid last-minute splurges.

2. Set an overall budget

Determine what you can afford to spend in total for the holiday season. This should include gifts, decorations, food, travel, and any other expenses. This amount needs to be based on your current circumstances and not necessarily what you’ve done in previous years. Having a predetermined budget will help you stay within your financial limits and prevent overspending.

3. Set a per-person budget

In addition to an overall budget, you’ll need to determine how much to spend on each person on your list. Having a number to work off will make it easier to allocate a designated amount per person. Ultimately, this helps you avoid the temptation to overspend on any one individual.

4. Save in advance

Start saving for the holidays well in advance. Setting aside a small amount of money each month can make a big difference when the holiday season arrives. This way, you won’t have to rely on credit cards or loans to cover your expenses.

5. Change the dynamics

Consider changing the dynamics of gift-giving. Instead of buying individual gifts for everyone, suggest a Secret Santa or a gift exchange where each person only buys one gift. This can significantly reduce the number of gifts you need to purchase and make the holiday season more enjoyable and less stressful.

6. Make a game plan for sales and specials

Take advantage of holiday sales and specials by planning ahead. Research upcoming sales events like Black Friday, Cyber Monday, and other seasonal promotions. Make a list of items you need and compare prices to ensure you’re getting the best deals. This strategy can help you save significantly on your holiday shopping.

7. Cash only

For those who really struggle with holiday spending, the old-fashioned way is to use only cash for purchases. The most effective way to use this technique is to pull the amount of cash out of the bank on December 1^st and put it in an envelope. Make purchases for those on the list, but when the money in the envelope is gone, you are done.

8. Get creative

Think outside the box when it comes to gifts. Handmade items, personalized gifts, or experiences can be more meaningful and often less expensive than store-bought items. A coupon for a home-cooked dinner, a certificate to go on that hike you’ve talked about for so long, or a free night of babysitting your niece and nephew for the night are examples of no or low-cost gifts that can be meaningful. Creativity can help you save money while still giving thoughtful and memorable gifts.

By leveraging some of these tips when creating a holiday budget, you can make the holiday season easier to navigate without any added financial stress.

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Investment advice offered through OneDigital Investment Advisors LLC.