Budgeting This Holiday Season
The holiday season is upon us! This should be a time of joy and celebration, but extra expenses may cause stress for some. Afraid your gift giving is going to put you into debt? If you stress over holiday spending and have trouble staying within a budget, we encourage you to try the following steps.
Make a holiday shopping budget
Take time to set a reasonable budget before you start shopping. Our financial experts recommend spending no more than 1.5% of your annual income during the holiday season. Determine a list of people you plan to buy for and the amount you plan to spend on them. Make sure to account for the extra money you plan to spend on holiday meals and entertaining. Then total your list and make sure to bring it along while you’re shopping.
Research before you buy
Once you have your list, do some comparison shopping so you get the best price. Search retailers’ websites and local ads to compare prices to find the best deals and discounts. If you decide to order online, consider whether the cost savings will offset any shipping costs. Retailers often have email sign-up on their website, with coupons and savings rewards for subscribers.
Track your holiday spending
Keep track of your spending. Take a few minutes to record your spending each time you make a purchase, working off the list you prepared. This will help you stay within your budgeted spending, and it’s also a great organization tool. Use online banking to monitor your accounts, and set up balance alerts so you get a notification when you reach your pre-defined limits.
Start planning and saving for next year
Taking the time to budget and track your holiday expenses this year will better prepare you for next year! Take a look at your spending vs. your budget. Did you stay within budget? Is there room to cut back? Did you have to use credit? If you used credit, develop a plan now to pay that down quickly. Once you’ve eliminated holiday debt, make a plan to start saving for next year and stick to it. Set money aside each month, and by this time next year, you will be much better prepared for the extra expenses of the holidays!
The holiday season should be spent helping others and spending time with family, not worrying about your spending. That’s why we created a downloadable Holiday Budget Planner to help you quit stressing and get back to enjoying the holidays.
Lincoln Savings Bank, Member FDIC.