By: Ashley Ann Reich
The holidays can bring about a variety of emotions for people. Some feel excited about the joy of Christmas, and for others, the holidays create a wealth of anxiety. Wherever you fit on the spectrum of holiday emotions, one thing is certain – money will be spent, and it is crucial to figure out how to properly allocate your money during this season to align with your goals and desires.
Make a List, Check it Twice
Black Friday and Cyber Monday saw a record number of retail shoppers at a whopping 200.4 million compared to prior years. Predictions are showing that Christmas will be trending upward, around 3%-4% more. This year showed that the economy was performing better than anticipated and consumers felt comfortable to spend money leading up to the Christmas holiday. With consumers spending more money, intentional gift-giving is imperative to curb impulse spending. A few tips include:
- Write down everyone that you plan to buy for
- Put a cap on spending per person
- Gather a list of gifts that fit within the spending threshold
- Keep an eye out for sales and buy early
Make certain to stay away from high-priced services such as gift-wrapping services, extended warranties, the credit card trap to save an additional discount, and buy now pay later plans on purchases. All of these extras will end up blowing your budget and will end up following you into the next year.
Home for Christmas or Coming to Town?
For some families trying to stick to a strict budget, staying home for Christmas may be the best option; however, most families are finding ways to still fit travel into their budget. Regardless of how much travel your family plans to do this year, it is a wise idea to continue to search for the lowest prices regardless of air travel, renting a vehicle, and all of the expenses that come with traveling out of town. Travel was up 12% over 2022, and experts forecast that we will see the same going into the holiday season. According to Nasdaq, 26% of Americans will spend over $1,000 on holiday travel this year, which will put a significant strain on anyone’s budget if not planned properly.
One article suggests comparing the costs and time commitment of flying versus driving to your destination. Flying tends to carry a hefty price tag but may save on the time element of having to be in the car for multiple days. Comparing websites for flights and searching for flights on different days of the week can help you save money in the long run. One practice I have used over the years is to research the location, consider an estimate of meals out, and build a buffer for unexpected activities and entertainment. Christmas is not an unexpected holiday and planning ahead of time (often months in advance) is the best course of action.
Don’t Be a Grinch
Christmas does not have to be all about gift-giving; however, finding ways to make memories regardless of your budget is necessary. For those who have a strained budget, giving a physical gift may be out of the question. If this is your situation, be honest with your family and friends this year and share how you need to prioritize your financial goals to continue to make traction on your debt – trust me, most people will fully understand. They will likely indicate they “don’t need a thing.” For those you still want to consider providing a gift, get crafty and look for online ideas of homemade gifts or make a special treat to hand out to those on your list. Dave Ramsey suggests combining efforts and going in on one gift with multiple family members or gift items that are gently used, especially when it comes to children, to save money.
If you are in a situation of abundance this Christmas season, consider giving to a local charity or perhaps finding a family to adopt as a way to give back. There are many organizations that provide options to donate toys to kids, provide meals, volunteer at a local food pantry, or visit local facilities such as nursing homes, police and fire departments, and community centers. There is no question that volunteering and giving back will provide great joy during the holidays.
The holidays create lasting memories for years to come, and spending time with those closest to you is priceless. Some of our traditions include simply sitting around the tree and reading our favorite Christmas story or putting on a holiday classic on the television. These options do not bust our budget and often are our favorite memories. When Christmas starts to get overwhelming, remember the simplest moments bring the greatest joy.
Merry Christmas to you and yours!