Stay on Budget this Holiday Season

With the holidays quickly approaching, many of us will begin piecing together our shopping lists for the essentials and gifts needed in preparation for the season. While some of us tackle the holiday season in an organized manner and stick to our initial purchasing plans, travel and event attendance, many of us are often last minute and spontaneous with our holiday spending habits. And it’s no surprise that numerous people will go over our forecasted budgets, causing us to start off the new year in more debt than desired.

For this reason, it’s important to establish a holiday budget before you start shopping, figure out ways that you can save money while shopping, look for ways to make extra income, and create a plan to recover in the high chance that you overspend.

Establishing a budget

When forecasting your holiday spending, consider all spending aspects of the season. This not only includes gift purchases, but also food and drinks for attending and hosting gatherings, travel, greeting cards, postage for sending gifts and cards, and charitable donations. Write down your shopping list and determine if the budget you have laid out is reasonable. If the budget seems unattainable or intimidating, look for areas you can cut down on or adjust to make the budget achievable.

Start saving and shopping early

Have you started saving up for the holidays yet? If you haven’t, have no fear, there are many ways you can start saving in a short period of time. 

  • Cutting back on takeout and meals: Whether it’s dinners out or buying work lunches, cooking at home and preparing for the days that you are out will drastically cut back on your weekly food budget.
  • Refraining from impulsive purchases: It’s common to go out for essentials and come back with a few extra purchases that seemed reasonably priced. However, these small purchases can add up. If you go to the pharmacy once or twice a week for staple home goods, but end up coming back with additional cosmetics or new socks, these small purchases can result in an additional $20 to $80 a week. Avoiding impulsive spending behaviours will help you to save money that can go to your holiday budget. 
  • Start shopping early: Last-minute shopping often leads to impulse purchases and higher costs. Prepare a list of items that you have to buy for the season, and look for when these items go on sale or wait for big shopping days like Black Friday and Cyber Monday.
  • Shopping online and using discount plug-ins: With the pandemic still taking place, many have shifted their shopping habits from in-store to online. Oftentimes, you’ll find certain items are selling for a better price on different competitors’ websites; you can also use discount plug-ins on your browser to search for coupon codes. 

Earning extra income 

Whether you work full-time or part-time, there’s always room to add a few extra hours of work into your workweek to build your holiday budget. Picking up additional contract work, shifts in retail or service industries, becoming a personal shopper, or starting a small side hustle that requires limited investment are all excellent ways to generate extra cash flow for the holiday season. Another way to earn some extra cash is by selling clutter and items in your house that are no longer used or needed. Selling things on Facebook Marketplace, Kijiji, and other online platforms is a quick and simple way to achieve this. Get creative and think outside of the box for ways you can boost your earnings. 

Creating a budget recovery plan

Even if you aren’t one to stray from budgeting plans, most of us have experienced a last minute invite to a holiday gathering, forgot a gift for a distant relative coming to town, or a family member or friend decides to come into town and stay with you for the holidays with days’ notice. All of these last minute occurrences that can lead to us going over our anticipated budget.

In a 2000-person survey, 77% of Americans expected to exceed their holiday budget while only 37% actually created a post-holiday budget plan to recover from their overspending. To be proactive about this, the first step to creating a recovery plan is thinking of responsible ways to approach overspending. 

According to USA Today’s survey, 29% of people creating a recovery plan will cut back on treating themselves to things like expensive dinners or nights out. 27% state they will spend less on everyday essentials like groceries and household items, and another 27% will put less money away into savings to help pay off their recent debts. While these are all responsible recovery plans, two common cases we see are less responsible: 10% of those recovering will avoid paying utilities and will only make the minimum payments on credit cards. While this might seem minimal, these two actions negatively impact your credit score and add interest fees on top of your existing debt. For this reason, we suggest choosing one of the more responsible methods for debt recovery after the holidays. 

Remember, when it comes to the holidays, it’s not about who spends the most on gifts and entertainment. It’s about spending time with those you care for in your life. Don’t feel obligated to excessively participate in the consumerism of the holiday season and make quality memories with those around you. But, if you do find yourself participating in the madness, do it responsibly and plan accordingly.