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Keeping your wallet intact during the holidays

Keeping your wallet intact during the holidays

Holiday Spending

In this series, we explore the area of holiday spending. This week, Megan provides some tips and tricks to keep your wallet intact.

When you think about your bank account's biggest nemesis during the holidays, your mind probably goes right to gift-giving. And this assumption would be true, many individuals spend a large chunk of change on purchasing items for their friends and families.

However, gift buying isn’t your accounts only enemy during this time. Other budget busters can include holiday parties, dining out, charitable donations, and even work events. With all the stress we are under during this time it can be tempting to throw caution to the wind and make cleaning up the budget our New Year's resolution.  

The holidays can be a stressful time, so try to incorporate some free self-care practices into your routine. Remember, you can say ”no”.

But I would urge you not to forsake your spreadsheet just yet. There are a few things you can do to avoid all of the holiday financial landmines.

Have a plan

The holidays don’t really sneak up on us each year, though it does seem like once Halloween happens we are instantly hurtled into Christmas chaos. But for the most part, you know what to expect each year and therefore, can plan for it (financially and emotionally).

Just like the big man himself, create a list and check it twice. Know who you hope to purchase gifts for and approximately the dollar amount you can spend on each person. It is important to reconcile these numbers with your budget to make sure you can afford all of the items on your list.

Gift-giving isn’t the only thing that can derail a budget. Wisely set aside money for charitable donations, making sure you can afford to give as much as you would like. Additionally, don’t overlook holiday travel, dashing through the snow can quickly add up.

Additionally, plan for pressure and stress. Retailers, coworkers, your mom, all will pressure you to buy more and do more. The holidays can be a stressful time, so try to incorporate some free self-care practices into your routine. Remember, you can say ”no”.

Setting expectations

Saying no becomes easier when you set expectations and stick to them. You don’t have to attend every after-work gathering, holiday party, or get together. Some take precedence, likely your family, while others you can politely excuse yourself from.

Set expectations for your budget as well. It can be difficult to decide who you are going to buy for and what amount you can spend. We want everyone to feel loved and appreciated. But this doesn’t always translate to gifting them expensive things.

Change up your giving style

Once siblings and cousins start gaining significant others and having children, the size of your family booms. This doesn’t mean you have to buy for everyone though or your budget will probably bust.

Get with your family and see if you can draw names from a hat, or even participate in a secret Santa. You don’t have to spend a small fortune all in the name of family.

If you really want to switch it up, consider pooling money that would have been spent on gifts and instead give to charity. Your family will have a memorable experience while being able to do something kind for others.

Beware of sneaky extras

Small splurges throughout the season can add up. A picture with Santa, hot chocolate for everyone while at the parade, or even a round of drinks at the after-work party. It isn’t difficult to reconcile spending a little extra simply because it is the season of joy. But those splurges can slowly eat away at your budget.

The holidays can also lead to lifestyle inflation, or when you spend more because you earn more instead of saving the surplus funds. Holiday bonuses, monetary gifts, and even extra income from working overtime can boost your profits. However, just because you have more cash flowing in doesn’t mean you should opt for that latte on the way to work or spring for a new jacket. Instead, put a portion of your “extra income” away in a savings or emergency account.

Plan ahead

Even if you weren’t fully prepared for this holiday season and you went a little overboard, there is always next year! You can plan ahead for the annual increase in spending and prepare your budget.

One way to do this is by opening a holiday savings account. You can use this year's spending to come up with a figure for next year. Then, divide this number by twelve to deduce how much you will have to contribute each month to cover your Christmas spending. When that time of year arrives again, you can spend all of what you have accrued in your account without feeling guilty.

The holiday season isn’t about being a scrooge or a grinch, and if you spend a little extra, that’s okay. But by following the tips above you can be better prepared for your spending and feel less remorseful afterward; starting the New Year with your budget intact!

An authentic perspective on managing money

Being honest with yourself is the first step to being smarter with your money. We’ll show you how. Let’s get better together.

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And away we go

All set!

This is the beginning of a beautiful friendship. In the meantime, are you curious to know what emotions drive your spending? Take our quiz to find out.