You love the holidays. The hot cider or eggnog with friends. The happy holiday songs. The beauty of the snow. But all this beauty and fun can be hampered by a lack of cash. It’s easy to see why. According to Elle Decor, the average person spends $830 on gifts; Four-hundred-sixty-two dollars of that will be on family alone.
If you find yourself muttering, “Ouch,” then chances are you know the pain of having too few dollars come the holidays. Or worse, you envision your budget after the holidays are over. But your holiday spending doesn’t need to break the bank. Follow these seven tips to help bolster your finances this holiday season.
1. A Budget is Your Friend
It can feel difficult and disappointing to stick to a budget, but your holiday budget can save your wallet in the long run. However, with some advanced planning, you can make this work. The trick to budgeting anything is to set up a budget ahead of time. The holidays don’t have to feel like an emergency. Really savvy budgeters plan on buying a little bit throughout the year. By doing this, they aren’t asked to fork over money for gifts and holiday food all at once.
If you didn’t budget for this year, no worries. The next section will give you some ideas about what to do right now. However, once the holidays are over this year, plan on sitting down and creating a budget for the upcoming year.
2. Financing the Holidays Now
Even the best-laid plans can go South in the face of an emergency. A broken furnace, an unexpected auto accident, or even an unexpected visit from an old college friend can eat into your holiday stash. If that happens, you do have options like short term loan solutions or credit cards. If you must borrow money from a title loan lender or if you need to accept a credit card offer, go ahead and do it, but do it with a plan.
Once you start putting together your holiday budget for next year, be sure to include the payback for this emergency solution. And be sure to set up two separate budgets to try to bypass an eventuality like this in the future.
3. Alternatives to Store-Bought Gifts
If you can’t bear the thought of not getting gifts for everyone on your list, Nolo.com suggests a more personal alternative. Instead of drawing names and only buying a gift for one person in your circle of family and friends, think about making gifts. A tin of homemade cookies, a handmade journal with special papers, or a drawing count as just some of the options you have.
An alternative to this is to make a coupon book and gift your skills to people. If you’re a plumber, offer to fix someone’s sink. If you offer massage therapy, give that as a gift. If you’re a beautician or barber, offer your friends and family a cut and style.
The beauty of this kind of gift is that the recipients know that you care about them enough to make time to make gifts for them.
4. Draw Names
When you absolutely can’t get out of gift-giving, think about drawing names. This tactic works well for a group of mutual friends or for office parties during the holidays. This type of strategy works because it not only limits the amount you can spend on the gift itself - say $10 to $15 - but it also limits the number of people you’ll buy for.
5. The Holiday Closet
Why not earmark some space for your holiday things? BankRate.com suggests a “Christmas closet.” This is a space where you store extra wrapping paper, bows, gift bags, and even leftover gifts. Keep the closet stocked throughout the year. These items can often be hidden expenses during the holiday season. Planning for them ahead of time will help you manage these.
6. Free or Inexpensive Holiday Activities
While much of your holiday expenses will come from gift-giving, that’s not where all your money will go. Festive celebrations are just as much a part of the holiday season. You don’t need to forgo these. Instead, the Practical Money Skills website suggests that you partake in free or low-budget holiday fun.
So what kind of activities are we talking about here? Well, your local movie theater might show “It’s a Wonderful Life” in exchange for some canned goods for the local food pantry. Or maybe you and your family can go Christmas caroling with the neighbors. Even a night at home playing board games and eating popcorn can be a fun family night.
7. Why Not Recycle?
Recycling is one of BankRate.com’s suggested ways of saving money and giving back during the holidays. Some organizations allow you to recycle items like technology or ink cartridges for store points. These points will save you money on future purchase.
Or if your city has a cash for recycling program, why not take advantage of that? Plastic water and soda bottles, tin cans, and other items can earn you cash throughout the year. These monies can then be earmarked for savings and holidays.
Last Thoughts on Holiday Budgets
As you can see, the holidays don’t have to be your budget downfall. Budgeting for the holidays and beyond is the best way to save your wallet. Whether you opt to draw names or shop throughout the year or any combination thereof, you can get your finances under control before, during, and after the holidays. Taking the time to do that ensures that you have a joyous holiday season and a more profitable year ahead.