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Avoid Overspending During the Holidays

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The holiday season brings with it parties, gifts, decorations, food, family and just a lot of fun. This season can also add a lot of extra financial stress to your household budget. Too many people head into the holiday season without a plan and come out in January with even more debt than they already had. With a little preparation, you can avoid this trap and sail through the holiday season without spending too much. Here are some great tips to help you avoid overspending during the holiday season.

1.      Set a Budget

Before you even start shopping for your first gift or purchase that great party dress, you must sit down and make a holiday budget. Consider everything you will need to purchase over the holidays, such as food, decorations, gifts, a new outfit, travel expenses, and entertainment costs. Determine how much you have available to spend in each of these categories.

Experts suggest spending no more than 1.5 per cent of your income on the holidays. So keep this in mind when setting a budget. Now the hard part is going to be sticking to your budget, but it is very important that you stay within your limits. If you overspend in one category, you will need to cut back on another, just do not go over your total holiday budget.

2.      Make a List

Along with your budget sit down and make a list of everything you need to purchase. This includes all of the food items you will need and a list of all the people you want to purchase gifts for during the holidays. A list will prevent you from purchasing items that you really do not need and from shopping on impulse. A list will also help you stick to your budget.

3.      Plan Early

The earlier you start planning for the holidays, the less money you are likely to spend. Once you have set a budget and made a list of all the things you need, you can look for the best deals. You should always shop around and try to find everything you need for the best price possible. Wait for bigger priced items to go on sale, so you can get them at a reduced rate.

4.      Put Away the Credit Cards

The number one trap that consumers fall into over the holidays is to charge all their purchases on their credit card. You are less likely to keep track of your expenses and stay within your budget if you are shopping with credit cards. Not only that, but going in to more debt for the holidays is that last thing you want to do. Instead, make all your purchases with disposable money and do not spend more than you have available.

In addition to credit cards there will be other tempting loan options advertised all over the place. Staying away from credit in general is the best thing you can do. 

5.      Consider Homemade Gifts

If you are having trouble budgeting gifts for everyone on your list, consider making homemade gifts. This can include practically everything from homemade cookies or breads, a holiday decoration, jewellery, candles, blankets, decorative pillows, or any other homemade gift.  Not only does this provide a more personal gift to give to those on your shopping list, but homemade gifts are oftentimes much less expensive.

Preparing for the holidays ahead of time is the best action you can take to avoid overspending. This will give you more time to think creatively about how to get more for less money rather than buying on impulse. Remember the most important thing is that you do not spend more money that you have available. This will make the holiday season more manageable and help you start the new year off without added debt.

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