6 Financial Tips to Avoid Overspending This Holiday Season

Written by Carly Simon-Gersuk

The largest gift-giving season is just around the corner, and this year it will be different as many of us will not travel to visit family and friends. Nonetheless, a worry on many individuals' minds this time of year is how they can get through the holidays without spending a fortune. It is possible to enjoy the holidays while not going into debt and here are some tips to help you avoid overspending.

1.Create a holiday spending budget

Whether you have saved money or plan on using credit cards, or a mixture of both, head into your holiday shopping with a plan. Take a look at your budget. Maybe you have started setting aside money a few months ago in preparation or maybe you need to assess where additional funds for the month can come from. Either way, decide realistically what you can spend this holiday season. Consider which gifts you want to buy and if you can attend or host any events. Allocate specific amounts for things such as gifts total, gift extras (ie wrapping and cards), shipping, food and drinks, travel and decor.

2.Assess your credit and debt

Avoid hurting your credit score and assess your current credit. If you are in good credit standings, consider if increasing your credit limit would be beneficial for you. By increasing your credit card limit you are not asking to spend more, but it gives you some cushion and can build your credit score if utilized well. For instance, if your card limit is $1000 and you spend $300, that is a utilization rate of 30%. With an increased credit limit of $2000 and you spend $300, that is a utilization rate of 15%, which is better for your overall credit score.

Another option if your credit is in good standings is to consider applying for a credit card with a 0% APR introductory offer. If you can budget to pay your credit off within the introductory period, it will not hurt your credit score and can help finance your entire holiday spending without any interest.

3.Make your own “Naughty or Nice” Lists

Knowing who you are buying gifts for, and possibly narrowing down your list, will help you stick to your budget. While many people love to share holiday cheer with gifts, consider shopping for just your immediate family. There are other options of gifts you can present to family, friends, employees and more. Consider baking cookies, printing holiday cards, or even your time. While face-to-face time may be a tricky thing to give this year in quarantine, there are ways to give your time; maybe plan a full evening on zoom with your grandparents, plan a trip to go see your siblings or friends once restrictions are lifted, or even make a : home-cooked meal” certificate to give to your parents.

4.Personalized Gifts

Remember, a small thoughtful gift is often worth more than an expensive gift that may never be used. Avoid overspending on impulse or trendy gifts, and consider what individuals on your gift list can actually use. And like mentioned before, the gift of your time is something people may love the most. 

This year has been rough on many individuals and it is okay that you might not be able to afford gifts or to do everything. Be honest with yourself, your family and your friends. The gift of gratitude can go a long way.

5.Utilize coupons and sales

Finding the best deals undoubtedly will save you money, you just have to take the time to prepare efficiently. Before you shop, check online or in the paper for coupons available at the stores you are likely to shop at. Also, compare the price of items from different stores. For instance, this year many stores are starting their “Black Friday Deals” early. If you know what items can be found at various stores, do a price comparison and shop for the best deal.

6.Track your spending

It is important to track your spending to ensure that you have not gone over budget or spent extra money elsewhere because of sales or additional items. Stay financial wise and aware by calculating your expenses and comparing it to your budget. This can easily be done in an Excel spreadsheet or on paper. At the end of the day calculating your expenses will help you from overspending and may even save you money.

 

Written Carly Simon-Gersuk