7 Steps to Help You Budget for a Stress Free Holiday Shopping Season
The holidays are a time of joy, light, and celebrations when families and friends gather from near and far to spend time together. The season is certainly a special time of year. Yet all the celebrations, the travel, the entertaining, the gift giving, and the food and drink that is associated with the festive season comes at a sometimes-hefty price tag.
No matter where you’re from or what you do, holiday shopping can certainly leave a dent in your wallet. In fact, research has shown that 36% American shoppers incurred holiday debt in 2021 year, and they owe an average of $1,249. These days the holiday spending period seems to grow longer with each new year, some holiday shopping and decorating even begins before Halloween. For some, the thought of the upcoming holiday season can bring stress and worry rather than happiness and excitement.
The good news is, weathering the holiday shopping spree and staying sane doesn’t have to be an impossible task. Taking some time out now to plan, make a budget, and ensure that you have the right financial tools, will help you save money and eliminate feelings of stress as the season approaches. Follow these 7 steps to help you budget for the upcoming holiday season allowing you to fully enjoy the best parts of the holidays with those you love.
1. Understand Your Capabilities
The first step in creating a workable budget for your holiday shopping is to understand exactly where you’re at with your personal finances. This isn’t necessarily a fun task, but it’s an important one to reveal how much you can comfortably spend on gifts and the holiday season.
Examine your current accounts and make sure you dive into any sources of funds that you consider to be savings. In addition to your current accounts and existing savings, examine how much existing debt you are balancing. Are your credit cards paid off or do you have a consistent monthly payment? Once you understand your existing available funds and review outstanding debts, you can move on to the next step of creating your holiday budget.
2. Forecast For Your Income
The next step for making a successful holiday budget is to estimate how much money you expect to earn over the festive season (from about November to January). Examining your pay stubs and bank account information from last year is helpful in determining where you’ll be this year. Just average out the amount of money you’ve earned over the last month then multiply it by three to figure out what you can expect to have for the holiday period.
3. Determine Your Budget
Once you’ve set your forecast as to the income you can expect, you can then begin to calculate your basic budget. This begins with your expenses. To determine what you can spend on your holiday shopping, you need to create a budget for all your necessary living expenses such as rent, insurance, groceries, gas, utilities, and other expenses. Then multiply this budget by three (representing the three holiday months November – January) to understand your basic expenses.
Once you have your projected income and your basic budget with expenses prepared you will then be able to understand how much potential savings you will have left over which you can spend on gifts, celebrations, travel, and other holiday needs. To arrive at this number of possible savings, you would subtract your expenses from your income.
If your budget has demonstrated you will not have adequate savings for the holiday, it is time to rethink your plans, reevaluate your gift ideas and consider other financial alternatives to accomplish the necessary holiday tasks. If you do have a low interest credit card, you may consider using it reasonably if it means you get to travel and spend time with your family, but keep in mind the expenses add up and once the holiday season is over, your bill will reflect the choices you have made.
4. Organize Your Gift Lists
With your spending budget in mind, it’s time to allocate where your savings will be headed by organizing your gift lists. Start by writing down everyone that you need to buy a present for, from your parents to friends, to aunts and uncles, to coworkers. Decide how much you want to spend on each person on your list and assign them a dollar amount. This will help you stay organized, ensure that you remember everyone on your list, and stay in budget. Brainstorm gifts that you can give each person that are either equal to or below the cost helping you to stay on track.
5. Start To Shop Around and Compare Prices
Research is often the key to smart holiday shopping within budget. If you have multiple gift options in mind for everyone on your list, then you can start by researching where you can get the best deal. You can be at an advantage to get the best price by checking different stores, online shopping, or using price comparison tools.
As the early bird most often definitely gets the worm, you can also take advantage of Black Friday, Cyber Monday, and other holiday sales to get the best deal on your desired present.
6. Stick To Your Budget
It’s tempting to overindulge during the festive period when everyone seems jolly but creating a budget you can stick to will help you come out of the season without a mountain of debt. Some people may find it easier to adhere to their budget by withdrawing the money they intend to spend on gifts in cash so that they can keep more of a visual track on it while some prefer to take advantage of a low rate credit card instead.
Make the Most of Your Budget with a Members Plus Credit Card
It’s easy to get caught up in all the excitement surrounding the holidays. Preparing a budget before you head out to shop and celebrate with the ones you love will not only help you stay in control of your finances, it will help you enjoy the season knowing your good choices will start the new year off on the right foot.
Using a credit card responsibly is a great way to add some flexibility to your budget. If you decide to use a credit card this holiday season as part of your strategy, reward yourself at the same time with Members Plus Credit Union’s Rewards MasterCard®. You can apply today to start earning points immediately which can be redeemed for cash, to purchase travel plan, or at the CURewards Mall!*
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