American consumers are expected to spend $1,530 this holiday season on gifts, travel and entertainment, according to PWC, 7 percent more than in 2022. Two in five (40 percent) of consumers are expected to spend more than they did last year.
With the rise in the cost of almost everything, the holidays can be draining, both emotionally and financially. For those looking to budget for the holidays, this can be very difficult, especially if your friends and family aren’t on the same page as you when it comes to finances or spending during the holidays.
If you absolutely love the holidays like I do and are looking to make the most of it without breaking the bank, read on for seven boundaries you can set now to set yourself up for financial success.
Set Holiday Spending Limits
Before you start shopping for the holidays, sit down and make a strict budget for how much you’re allowed to spend. Look at your finances and make sure it’s a number you can comfortably manage.
The money you can reasonably spend on gifts is money that isn’t going to bills. That said, if you want to have a little more to spend, this doesn’t have to be just the money left over at the end of the month. As long as you are using cash without spending your rent money, you are doing great.
Make a List and Stick to it
When it comes to gift-giving, it’s easy to get caught up in the holiday spirit and overspend. That’s why setting a budget beforehand is important. To help you stay within your budget, list out the primary people you intend to buy gifts for, as well as the amount you want to spend on each person.
The best part about doing this early is that you can also start purchasing earlier too. There’s nothing worse than making your list in November and realizing your budget doesn’t line up. If you start buying gifts here and there now, your wallet won’t be hit as hard later.
Shop the Early Sales
Don’t wait for standard seasonal sales like Black Friday, Small Business Saturday, and Cyber Monday. Popular retailers have sales and deals literally all the time.
Whether you’re looking for more affordable gifts or new additions to your holiday wardrobe, these early-season sales will often get you good prices on bigger ticket items you’ve been eyeing. Shopping early deals will also help you get ahead of the holiday rush later in the season.
Shop Around for the Best Deal
Look for sales, discounts, and promotions to get the best deals on your holiday purchases. Plan your shopping around sales events, and use apps or websites that compare prices.
Retailers are expected to roll out the sweetest deals of the year during the traditional price-slashing window between Black Friday and Cyber Monday. Be sure to do your research on prices and consider online retailers that might have better offers.
Consider Alternatives to Traditional Gifts
Instead of expensive gifts, consider alternatives such as homemade gifts, experiences, or charitable donations. Also consider giving the gift of time. Your loved ones who live far away might love nothing more than a visit from you. This can be a meaningful way to show your appreciation without breaking the bank.
DIY Decorations and Wrapping
Buying gift wrap alone could put a hole in your pockets. Americans spend about $3.2 billion annually on gift wrap, according to research by Hallmark. Get creative and make your own decorations and wrapping paper. Not only can this be a fun and festive activity, but it also saves money compared to buying expensive decorations and gift wrap.
Reduce, Reuse, and Recycle
Cheaper, less durable items often wear out quickly, creating waste and costing you money. Give gifts that don’t require much packaging, such as concert tickets or gift certificates. Send recycled-content greeting cards to reduce the amount of virgin paper used during the holidays.
Consider gifts with an environmental impact like a stainless steel water bottle, a reusable grocery bag, a solar-powered phone charger or toys made from recycled material. Also remember: homemade baked goods are always a hit. Take every opportunity to recycle large cardboard boxes, gift boxes, electronics, and Christmas trees as well as everyday recyclables
Setting financial boundaries during the holidays is a proactive and responsible approach to managing your finances. It allows you to enjoy the season without compromising your financial well-being, fostering a healthier and more sustainable relationship with money:
- It prevents overspending as the holiday season often comes with increased expenses, including gifts, decorations, travel, and entertainment. Without clear financial boundaries, there’s a risk of overspending, leading to financial stress and potential debt.
- It also reduces financial stress, which is a common issue during and after the holiday season. Setting clear boundaries helps manage expectations, reduces stress, and allows you to enjoy the festivities without constant worry about money.
- It reduces Post-Holiday Debt as overspending during the holidays can lead to credit card debt, which may take months to pay off. Setting financial boundaries helps prevent the accumulation of debt and the associated interest charges.
Without financial boundaries, there’s a risk of making impulsive and regrettable purchases, which can hinder progress toward other financial goals.