Top 6 tips for holiday 2020 budgeting
We’re about to enter a unique holiday season — so what’s one way to take seasonal stress off your plate? Be financially prepared. According to the National Retail Federation, Americans report spending $1,007, on average, for holiday-related expenses. Ensure that you can enjoy the season as stress-free as possible by using these budgeting tips and tricks.
Understand (and set) your limits.
Make a list of your regular monthly, fixed expenses — these are predictable and will need to be taken care of. This list should include things like loan repayments (home, auto, student), insurance, credit card payments, groceries, gas, education/childcare, and other regular budget items. Then, start identifying buckets of spending specific to the holidays — and write down estimates on cost. Examples include:
- Holiday cards and postage
- Decorations and wrapping
- Unique food items, such as a turkey or special desserts
- Gifts (more on this below)
Add your holiday budget and regular expenses together and compare it to your monthly income. This will give you an idea on how much you need to save or cut.
Make a list, check it twice.
Write down everyone you’d ideally like to give a gift to this holiday season — then put a dollar figure next to their names for a gift amount that feels appropriate. This should be the full list of people you want to recognize such as family and friends, teachers, coworkers, household help, and mail carriers.
Tally this figure. If it fits into your overall holiday spending plans, well done! If not, revisit the list and start adjusting figures (or the number of names!).
Not everyone needs something store-bought. Sometimes, a little sweat equity goes further than something purchased. Can’t afford a gift for everyone on your list this year? Bake some cookies and wrap them in decorative baggies, decorate picture frames or hand-make ornaments. Or, gift your time. Make coupons for a “free night of babysitting,” a romantic homemade dinner, or a big post-pandemic get-together.
Build virtual opportunities to connect.
Many families and friends won’t be gathering for holiday parties or cozy gatherings this year. While this might help your holiday budgeting, it’ll be important to create other ways to feel connected. Organize an “ugly sweater” Zoom happy hour or participate in a team volunteering event, like a virtual Turkey Trot 5K.
Be a better bargain hunter.
Find the perfect gift for a loved one that’s out of your budget? See if the store has a price-match policy and do an internet sweet for price comparisons. Start collecting coupons and discounts now and set an alarm to scour Cyber Monday deals.
Get an early start.
One of the easiest ways to overspend during the holidays is to procrastinate. Buying gifts last-minute means paying extra for expedited spending, running into out-of-stock items, and adding stress.