No matter the size of your family, whether you travel or host the season’s events, and splurge or save on gifts, overspending during the holidays can feel unavoidable. The month of December is inevitably filled with parties, gift exchanges, volunteer and donation drives, travel needs, and even local holiday festivals and festivities. While all these elements make the holidays the most wonderful time of the year, they also make the time between Thanksgiving and December one of the most expensive times of the year. One of the biggest budget breakers for most families is gift-giving. This season, don’t break the bank just to show your loved ones how much you care. Follow our budget-saving tips below to maximize your holiday joy without suffering buyer’s remorse in January.
1. Check Your Credit Score
Driven by feelings of altruism, many Americans splurge on gifts for their friends and family—relying on the payment procrastination offered by credit cards. Retailers and department stores also boost their line of credit sales goals at the end of the year. As a result, they dangle tempting offers in front of shoppers that promise to reduce their purchase price by opening a line of credit.
To help you avoid the lure of relying on plastic this season, check your credit score before you begin your holiday shopping. Credit utilization is the second highest factor in your credit score. If your credit score is lower than you’d like, then you may be better served not opening up additional lines of credit or maxing out your existing cards this season. Knowing where you stand financially will help you set your budget and keep from overspending.
2. Agree Collectively on Your Spending Strategy
For some, the reason why the overspend is out of a pressure to give as extravagant gifts as those around them. If you have one sibling who spoils all the cousins with expensive electronics, you may find yourself making purchases outside of your budget to try to compete with your sibling’s generosity. Have a candid conversation with your family to set agreed-upon guardrails around family spending. If appropriate, replicate the discussion with your group of friends, co-workers, neighbors, or fellow parents.
3. Create a List. Check it Twice.
Before you make your first-holiday purchase, create your gift recipient list. Some shoppers break their budget on the last few days before the holiday when they realize they forgot to buy someone (or someones). Under pressure to make the holiday deadline, they settle on spending outside their budget. Start your holiday shopping by identifying form whom you will be buying gifts.
Also, be strategic as to whether your gift-giving will be wide or deep. If you have a large family and network of friends and co-workers, then consider spending less per person. If you have a small family or only purchase gifts for your children, you can afford to spend more per person. White Elephant or Secret Santa exchanges are cost-saving options for people who want to go deep but have a large family.
Remember that while financial stress can negatively impact your health, spending time with your loved ones can be one of the best medicines for your mind, heart, and soul. Make this holiday not about what you buy, but who you’re with, and focus on what matters most.