The holidays are a time of joy, happiness, and celebrations when families and friends gather from near and far to spend time together. The season is certainly a special time of year. Yet all the celebrations, the travel, the entertaining, the gift giving, and the food and drink that are associated with the festive season come at a sometimes-hefty price tag.
In fact, research has shown that 35% of American shoppers incurred holiday debt in 2022, and they owe $1,549. These days the holiday spending timeframe seems to grow longer each year, with holiday shopping and decorating beginning before Halloween is even a distant memory. For some, the thought of the upcoming holiday season can bring stress and worry rather than happiness and excitement.
The good news is that weathering the holiday shopping spree and staying sane doesn't have to be an impossible task. By taking some time out now to plan, make a budget, and ensure that you have the right credit card at your side, you can save money, worry, and time as the season approaches, freeing you up to fully enjoy the best parts of the holiday time with your loved ones. The more you do before the madness kicks in, the better off you'll be. Follow these 5 steps to help create a budget and get set up for stress-free holiday shopping.
Mastering the Art of a Holiday Budget [5 Simple Steps]
1. Understanding Your Finances
The first step in creating a workable budget for your holiday shopping is to understand exactly where you're at with your personal finances. This isn't necessarily a fun task, but it's an important one to determine how much you can afford to spend between all your gifts and personal needs.
Examine your monthly income and outgoing expenses. With your current budget, what will you have left remaining at the end of the month? This will be the disposable income that you can use toward holiday gifts.
You can build more flexibility into your budget by reducing the number of expensive gifts you may be planning on buying. Consider lower-priced gifts as an alternative or making handmade items. If you can't avoid the number of gifts or know there is a big ticket item on your list, you can also add flexibility to spend responsibly by using a credit card to spread out your purchases and payments.
2. Determine Your Holiday Budget
To fully understand what you can spend on your holiday shopping, you'll need to create a budget for all your necessary living expenses such as housing, insurance, groceries, gas, utilities, and other costs. Multiply this budget by two to understand your basic expenses.
Once you have your income and your basic expenses prepared you'll have a better picture of what can afford to spend on gifts, celebrations, travel, and other holiday needs. Simply subtract your expenses from your income and the figure you're left with is the amount you can spend on your holiday needs. If you wish to narrow this down into what you can spend specifically on gifts, subtract the amount you anticipate spending on travel, celebrations, and other holiday necessities, and the total you're left with is your budget for gifts.
This is where having a low-interest credit card can eliminate some of the budget-managing stress. Knowing that you have an alternative way to offset some of your expenses allows you to create a budget with re-payment options including taking away the immediate outflow of valuable cash.
3. Organize Your Holiday Gift Lists
With your spending budget set aside, the next step is to allocate exactly where that money will go by organizing your gift lists. It may be helpful to create a budgeting worksheet or a list where you outline a gift budget for each person on your list.
Start by writing down every person that you need to buy a present for, from family to friends, and coworkers. Don't forget your furry four-legged family members too! Decide how much to spend on each and assign them a dollar amount. Brainstorm a gifts that you can give to each one that are either equal to or below what you've budgeted for them, and jot down a few ideas next to their name. This will not only help you stay organized but ensure that you remember everyone on your list and stay within budget.
Budgeting and managing your money has never been easier!
4. Price Shop for Deals
Research is often the key to smart holiday shopping within your budget. If you have multiple gift options in mind for everyone on your list, then you can start by tracking where the best deals are to purchase them. To ensure you get the best price, check different stores in person and online, and take advantage of helpful price comparison tools.
As the early bird most often gets the worm, you can also take advantage of Black Friday, Cyber Monday, and other holiday sales to get the best deal on your desired gifts.
5. Stick To Your Holiday Budget
It's tempting to overindulge during the holidays because everyone is full of joy. But it's important to learn how to create a budget and stick to it because it will help you emerge from the holiday season without a mountain of debt. Some people may find it easier to commit to a budget by withdrawing the money they intend to spend on gifts in cash, while others prefer to take advantage of low-rate credit cards instead. If you've purchased presents online but set aside a cash budget, be sure to deduct this from the cash you withdrew and use it to deposit back into your account to pay off your credit card. If you've been extra vigilant with your budget, you'll hopefully have some extra money left over as a gift for yourself!
Make the Most of Your Holiday Budget with a Peach State Visa Credit Card
It's easy to get caught up in all the excitement surrounding the holidays and suddenly the mad rush to go holiday shopping sneaks up on us. Preparing ahead of time not only makes you feel in control (and less stressed), but it can truly save your finances and budget from taking a massive post-holiday hit.
Using a credit card responsibly is a great way to add flexibility to your budget. Peach State offers Visa Credit Cards to fit your budget with low-rate options to credit cards that earn rewards. You can apply today to start getting ready for the busy holiday season or contact us if you have questions about which card is is right for you.
To start your holiday budget off right, download our free "3 Practical Budget Templates That Actually Work!" Guide.
