The holidays are a magical time. Between the twinkling lights and the ever-familiar holiday tunes, the magic in the air is real. In fact, many people are willing to go to great lengths to make it as magical as possible. That includes spending a large chunk of their money on all sorts of holiday hoopla.
A data poll from American Research Group stated U.S. shoppers plan to spend an average of $929 on gifts alone. And for many of those Americans, that’s a lot of money to spend in just a few short weeks.
Fortunately, you can make all of your holiday wishes come true and keep your bank account happy if you set a plan to spend wisely. Avoid common money stressors with these 8 ways to afford the holidays.
1. Determine a holiday budget.
Before you start thinking about what you’ll buy and who you’ll buy it for, consider how much money you truly have to work with. Don’t step foot in a store until your budget is rock solid.
In most cases, the best way to set a budget is to establish a general spending cap. That’s the dollar amount you absolutely can’t exceed throughout all of your holiday spending. You must fit the cost of your gifts, travel and other activities under this amount. But, don’t just pick a number out of thin air. Review your bank accounts. Think about your normal monthly expenses. Crunch some numbers. Find an appropriate and realistic number to set yourself up for success.
And don’t forget to factor in all the little extra costs, like postage for holiday cards, party favors, decorations and other holiday cheer knick-knacks.
2. Make a list and check it twice.
Write down every person you plan to give a gift. It doesn’t matter how small the gift is – write it down. Next to the names, write the maximum amount you’re willing to spend on that item. Don’t forget to list all of the “extra” people in your life, like your mailman or babysitter (or dog sitter for those with fur-babies). If you always give them a little something nice around the holidays, make sure to mark it down to remain mindful of your budget.
After your list is complete, take some time to check it over. If an item doesn’t quite fit into your budget, adjust the amount or change the gift. Remember, it’s the thought that counts! Plus, it’s also incredibly important to not dive headfirst into debt over the black ankle strap heels your sister is dying to have. Keep your priorities straight, and spend within your means.
3. Pay with cash.
An easy way to keep your holiday spending in check is to strictly pay for gifts in cash. Once you decide on a budget, make a trip to your bank and withdraw that amount. Every time you purchase a gift, only use the physical money you have in your wallet or purse. Commit to not swiping a card or writing a check (do people still do that?!). Once the money is gone, your holiday spending is over.
This cash-only method is particularly effective if you have a history of racking up credit card debt during the holidays. Enjoy the celebrations and enter the New Year with your finances in healthy shape.
4. Track your spending.
Another key element to keeping your spending in check is to track your expenses along the way. And doing so doesn’t have to be complicated. One way is to create a specific bank account for your holiday budget. This separates your holiday costs from your everyday expenses, making it easy to see exactly what you spend and where you spend it.
You can also use a trusty spreadsheet to monitor your cash flow. Every time you purchase an item, enter it into the spreadsheet and let the auto sum function calculate the totals for you. Spreadsheets may get a bad rap for being “old-school”, but that doesn’t mean they aren’t an efficient and accurate way to track your money.
If you’d rather be a little more high-tech – there’s an app for that! Numerous mobile phone apps are available to help you track your spending in real-time.
5. Comparison shop till you drop.
If you have a particular item in mind for a friend or relative, do some cost comparison research to ensure you snag it at the best price. Trust us when we say your budget will thank you if you take the time to shop around. There are also a variety of comparison shopping sites and mobile apps available to help you cut down the time spent reviewing price tags.
Apps like BuyVia, ShopSavvy and ScanLife make it as easy as scanning the item’s barcode. The apps then promptly display prices at nearby stores or online retailers, making it quick and easy to find the best deal. Spread your money farther this holiday season by taking advantage of resources like these.
6. Give yourself the saving power of time.
If you can control anything, it’s how early you start shopping. Do yourself a favor and begin as soon as possible. By starting early, you can avoid paying top dollar for items that may dramatically increase in price during the last few days before the holiday.
Think about it this way: getting a jump start on your shopping can give you better odds of staying within budget and possibly save you enough cash to treat yourself. Win-win!
7. Take advantage of Cyber Monday and Black Friday.
This tip may be obvious, but it must be said. Developing a strategy for your holiday shopping to coincide with the two days known for dramatic discounts can be the perfect way to purchase a gift that is otherwise out of your price range.
And listen, we understand if the thought of marching through stores alongside all your neighbors (and their neighbors) on Black Friday is a bit overwhelming. But battling those crowds may be worth it when you snag a 46” T.V. for your dad’s garage at half the price. If you’re looking to stretch your dollars and cents this year, you just might want to consider a midnight rendezvous to your local retail store.
If you can’t bring yourself to shop on Black Friday, you always have its cousin Cyber Monday. Find some of the best deals all year from the comfort of your own couch – or work desk (don’t worry, we won’t tell your boss).
8. Cut back on the extras to afford the holidays.
Finding enough cash to survive the holiday months can be difficult for anyone. But sometimes, covering the costs is a simple as cutting back on the extras. And we don’t mean the extra wrapping paper or extra gifts for your mailman.
We mean all the extra items or services you typically splurge on during the year that you don’t necessarily need. Like, the $5 fancy coffee drinks you buy before work every Monday and Wednesday or the weekly lunch dates with your best friend on Tuesdays. We’re even talking about the extra dollars you shell out to an Uber driver after happy hour with your coworkers. Affording those activities during the year may be doable, but during the holidays, consider cutting back to give yourself a little extra room in your budget.