It’s no secret that the holiday season is one of the most expensive times of the year.
On average, Americans spend around $1400 during the holiday season, and for a lot of people those charges often go on credit cards.
Before you let this season break your bank account, let’s talk about some ways you can save money but also prepare ahead so it won’t hit your wallet as hard next year.
How to create a holiday budget
Now, when people think of the word "budget" they think of cutting back on anything fun. They don't think they can budget and have fun at the same time.
We're here to tell you that you can do both.
A budget is simply a range of money you want to spend. It's you being in control of what you're spending and only spending money where it matters most to you.
To get a good budget number, you'll want to look at what you spent last year. Or at the very least, take the time to figure out what the absolute maximum is you can spend so you don't go over that amount.
Once you know your budget, you can figure out what are the absolute essentials you cannot skip.
If you subtract those from the total, you'll be able to see how much spending you have left.
For example, if you have a budget of $1,000, but you know you need to fly home to see your parents, after you subtract the flight amount, that's what's left for the next essential thing on your list.
Plan as much as you can ahead
While it's easy to just think about the gifts you'll be getting people, there are other factors you're going to need to consider as well.
Things such as:
- Dog or pet boarding
The last thing you want over the holiday season is to end up with an expense you totally forgot about.
Factor in everything that you'll need to spend money on this season and consider leaving some extra money for unexpected expenses.
Talk about gifts and money with your friends or create new plans
Before you just assume everyone in your life wants a gift, you should ask. Some people might not want gifts this year or would rather focus on experiences you can do together instead of physical gifts.
You can even make some DIY gifts and get creative this year, if needed.
It's been a hard few years for a lot of us so if you're not in a good position, you don't need to put yourself into a ton of debt just to make everyone else happy.
You might need to create new plans for the holiday season and do something outside of your regular routine so it fits in your budget.
If you have the conversations ahead of time, it can remove a lot of the stress and guilt from your plate.
It will also help you get the full list of what people want for gifts. That way, you can start to hunt for holiday deals.
Set up a sinking fund for next year
The best thing you can do is to set up a sinking fund specifically for the holiday season next year.
Keep detailed records of how much you spend this year so you know how much to save for next year.
Saving ahead of time can save you a ton of stress so your next holiday season can be much more relaxing.
Looking for a great way to organize your sinking funds? Check out our planners!