‘Tis the season for spending time with loved ones, getting stuffed on delicious food, and quite possibly, doling out more cash than anticipated. As joyous as those holiday bells can be, the attached holiday expenses can take a toll on your wallet. And if you, like many others, find yourself in a financial rut year after year, once all the gifts have been opened and decorative lights come down, we have some tips for you.
So, trim those naughty holiday expenses, and clear the path to stress-free holiday spending, winter merriment, and, most importantly, post-holiday sanity.
Create a Holiday Budget
How much does the average American spend on Christmas anyway? According to the National Retail Federation, and based on trends from 2004-2019, Americans are typically projected to spend nearly $1,000. And it’s easy to see how quickly those numbers add up when you factor in holiday decorations, travel expenses, individual gifts, and miscellaneous items like wrapping paper and shipping costs.
Budgets are great tools to help manage impulse buys and prevent good-natured splurging. So, take the time to truly consider every detail of your projected costs, and make a list of your holiday expenses.
Next, based on those expenses, decide on your spending limit. Be sure, however, to avoid digging into rent money, bills, or rainy day savings. You’ll then want to allocate a specific dollar amount to each category of holiday spending, i.e., how much will you spend on decor… travel… gifts?
Finally, stick to the cash-only method. Do this by labeling envelopes with each holiday expense category (e.g. travel, gifts), and then put your predetermined dollar amount into each one. When the cash you’ve allotted for any one category is gone, it’s gone, and you’ll safely evade the temptation of overspending or putting extra items on your line of credit.
Examine Your Bank Accounts
When prepping for the holidays, it’s equally essential to cut back on expenses and reduce and eliminate useless charges to your accounts. So sniff out these sneaky expenses by taking a look at your bank statements and credit cards.
Truly evaluate where your money is going each month. Are you buying more “luxury” items than you should? Are you continually being charged for subscriptions you don’t use? Overall, are the debits to your account unreasonable in any way? If you answered yes to any of these questions, it might be time to take action and cut some costs.
Another reason to examine your bank statements is to determine whether your bank or credit cards are right for you. Do this by making sure you aren’t being charged useless bank fees or paying exorbitant APR rates. In short, are your cards/bank accounts saving you money or slowly draining your wallet?
Minimize (Don’t Eliminate) Miscellaneous Spending
Why minimize instead of eliminating your miscellaneous spending? Because the key to a successful habit is to make it realistic. Therefore, it may not be necessary to disconnect from everything you like doing or treating yourself to.
Doing so could cause you to resent the process and, in turn, give up on your entire budget and efforts.
After all, we’re not trying to steal your small comforts. Maybe that coffee in the morning really brightens your day. Perhaps weekly dinners with friends is a must-have for recharging your proverbial battery. Whatever the case, moderation is key.
Once you look at your bank statements to see where you can cut back financially, try creating a budget for your miscellaneous spending. Instead of buying multiple coffees throughout the day, try cutting it down to one and making your other coffees at home. (Or find a shop that allows free refills.)
And rather than ordering appetizers and top-shelf liquor at dinner, stakeout happy hours split an entree with a friend, and/or skip that pre-meal indulgence.
Say “Yes” to Secret Santas and Potlucks
It takes a village to celebrate the holidays, so opt-in on events that take a load off your chest… and wallet.
Whether you’re a culinary prodigy or love hosting a good holiday party, let your village help you out. Preparing and cooking feasts for all of your loved ones, as rewarding as it may be, can put a giant gap in your holiday budget.
Instead, make your specialty dishes, and allow your guests to bring sides and other desserts. This way, you can relax, welcome helping hands, and enjoy your holiday budget wiggle room.
Secret Santa’s are a great, budget-friendly way to celebrate the holidays. Not only will this reduce the number of gifts you have to purchase, but it allows you to designate a price limit, so you’ll know exactly how much to spend on your friend, family member, or co-worker.
Think quality over quantity as you select a meaningful, cost-effective gift for the person you’ve been assigned.
Get a Side Hustle
Grow your funds and minimize overall expenses by exploring different ways to make money for the holidays. Consider options like ridesharing, renting out a room, or selling goods and services online.
With a side job, you’re making money as you go instead of pouring from it until there’s nothing left. The true gift of a holiday season side hustle is that you can quite possibly make enough cash to cover your budget as well as stash away a little something extra for a rainy day.
Do it Yourself Gifts
When it comes to holiday gifts on a budget, DIY presents are a great way to shave costs. Although this idea may not be for everyone on your list, thoughtful gifts can far outshine pricey ones more often than not. And we’re long past the days of vague paper mache creations and cute, child-like drawings.
Start by evaluating the people you plan to shop for this year and consider their interests and hobbies. Would your friend with the self-care addiction be delighted to receive homemade bath salts and soaps? Maybe you’ll bring tears of joy to your grandparents’ eyes when they unwrap a creative collage decorated with pictures of loved ones, past events, and beautiful memories.
Get creative for the holidays by making your own thoughtful gifts, and of course, by saving a little extra cash along the way.
Negotiate and Lower Your Monthly Expenses
Log into your bank accounts and you’re likely to find sky-high utility bills, mounting grocery expenses, or crippling rent eating away at more than a third of your income. Here are a few quick tips for scaling back for the holiday season and beyond.
Negotiating cheaper rates on utility bills like electricity, sewer, water, and gas should always be your first stop when trying to save money in your current living space. But if you’re bound to one service, making small tweaks in your day to day life can also prove beneficial.
Reduce your sewer bill, for example, by cutting back on shower time and being more conscious of water usage. Or, try adjusting the thermostat and unplugging a few devices when you leave home to minimize energy usage.
Although your phone is important to daily life, overpaying isn’t a mandatory stipulation. You can save money by opting into autopay (many companies provide an additional discount for doing so), negotiating on price, or by switching to a cheaper, prepaid carrier.
Shop around for better rates on your auto, home, health, and life insurance. And don’t forget to inquire about monthly deductions like safe driving discounts, non-smoking incentives, or multi-policy rebates.
Make a grocery list in advance and only get what you need, opt for value brands where you can manage, and of course, never shop while hungry. Simply shop with a little more intention, and it could make a world of difference.
Slash Your Largest Expense
Take control of your money during the holiday season by trimming these unnecessary expenses from your budget. And if most of your income is being torn apart by rent like wrapping paper at Christmas, find an affordably priced apartment that better fits you, your budget, and lifestyle with ApartmentSearch.