This is no time to abandon your budget
Eating isn’t the only thing we tend to overdo during the holiday season. On average, each of us spent more than $800 on gifts, traveling and entertaining last year – and the amount should only rise again this year. And while it’s all in the name of spreading good cheer and creating special memories, it can be a significant financial obligation that could take several months to recoup.
Fortunately, with the right preparation, you can have it both ways – meeting your holiday obligations while still saving money. Consider these tips in the weeks approaching the festive season:
Make a budget
One reason it’s easy to go overboard financially is that many of us don’t put a cap on what we spend. We tend to focus on who we have to shop for and forget about extra costs such as cards or holiday party decorations. Instead, decide how much you have to spend – without putting your everyday budget into danger. If you really want to think ahead, make holiday spending part of your year-round budget, building in a savings plan for annual holiday expenses.
Don’t have a budget yet? Get started with our free budget template.
Use our new Ways To Save feature to get personalized tips on how to save more money
We just rolled out a new product called Ways To Save that we're really excited about. When you connect your bank and credit card accounts we look at your spending to see if there's any area where you could save money or earn rewards because of your spending patterns.
For example, we'll let you know if you've paid overdraft fees, if you're spending more than the national average on gas and how you can earn 1% cash when using a credit card like Credit One Bank, how much coffee you're buying, and much more.
Check out Ways To Save on our mobile app by connecting your accounts today and navigating to the Home dashboard.
Pay off your credit cards in full
If you have to use a credit card - as many of us do for online purchases – make it mandatory for yourself to pay off your balance by the end of the month. Any balances you carry over to the next billing period could mean you ultimately pay extra, offsetting any bargains you may have found. If possible, use credit cards with the lowest interest rate.
Read more about credit cards.
Or use cash
One of the simplest ways to stick to a hard spending cap is to withdraw your spending total at once – in cash. This could be a good strategy if you’ve had trouble overspending in the past.
Saving on food and drink
Hosting a holiday fiesta doesn’t necessarily mean breaking the bank. For starters, doing your own cooking will usually give you cheaper and healthier fare than store-bought goodies. To keep the labor (and stress) down, organize a potluck with each guest contributing a different dish. As for alcohol, avoid a huge expense by serving a signature drink at the party – dig out that egg nog recipe!
Go easy on the deals and sales
Yeah, sales are great – if they’re on products already on your gifting list. But you could be wasting money if an insanely low price on a random item makes you spend more than you planned.
Download one of many smartphone apps (like Amazon’s Price Check) that lets you comparison-shop a certain item among other online retailers. If you do find a lower price, many major retail stores will match that price on the spot.
For more tips for finding the best shopping deals.
Gifts come in many forms
It’s not just a money-saving exercise to think about giving presents that can’t be stuffed into a box. Many of your friends or family members may appreciate a more meaningful gift of your time or service, like offering to babysit or organizing a family outing to a (free) museum or local event.
Say yes to Secret Santa or White Elephants
Gift exchanges are common among co-workers, and there’s no reason you can’t organize the same process among a group of friends or an exceptionally large family. Everyone can focus on a meaningful gift for one person and avoid the stress – and the expense – of shopping for everyone.
For Secret Santa, put everybody’s name in a hat, and then let everyone draw one name to shop for. Chances are, the rest of the group will also be relieved to buy just one present instead of 10.
Another option borrowed from the workplace is a White Elephant gift exchange. The same money-saving logic applies where you just need to contribute one wrapped present. One person selects a gift of their choice from the gift pile and opens it. The next person can then either elect to “steal” a gift that’s previously been opened (and the person whose present is stolen gets to open a new wrapped present), or open a new gift. Search “White Elephant” online for more details.
The bonus? Secret Santa and White Elephants often introduce an element of novelty and surprise that can be especially memorable for the entire family.
Regifting – it’s OK!
The stigma of passing through gifts you’ve received to somebody else is gone. In fact, a recent Consumer Reports survey found that 1 in 5 adults re-gift presents. Only regift brand-new items and wrap the present yourself, including a personal card so it still feels meaningful to the recipient. And don’t press your luck – it’s probably best to make sure the giver and receiver won’t cross paths (that means avoiding re-gifting within the same family!).
Save those receipts
Despite your best intentions, not all gifts work out. Ask retailers for gift receipts that you can include with your gifts so they can be returned or exchanged more easily. Having a receipt also helps speed up refunds and returns, as well as helping to validate warranties.
The holidays are full of potential financial pitfalls – after all, the season practically orders us to spend money! But that doesn’t mean budgetary discipline has to disappear. Use these suggestions to keep yourself on track and start the new year with your financial goals in sight.
The views expressed above are those of the author and do not reflect the views of MoneyLion Inc. Any statements or speculation provided in this blog are intended for informational purposes only. MoneyLion does not guarantee the accuracy or completeness of any of the information presented above.