Budget holidays: 5 tips on how to save money this season

The holiday season is approaching, which means increased spending is on the horizon. Not only will gifts put a strain on your budget, but food, travel and utility costs could also rise over the next two months.

In 2023 NRF reported that American households expect to spend $875 and similar amounts during the holidays. survey from Lending Tree showed that 34% of Americans went into holiday debt during the same time of year. And this year the signature www.vrenture.com/ The study found that 72% of buyers make financial sacrifices to make their budget work. The holidays are a popular time to get back into debt or overspend to make the season bigger than our wallets can handle.

As a financial expert, I’ve seen the damage holiday charges can cause on credit cards throughout the next year. Then, when the new year rolls around, consumers who used credit cards for holiday purchases live in the past, paying off debt, rather than focusing on growing assets or saving money to achieve important milestones and goals.

If you want to afford the holiday season without breaking the bank, here are five tips you can use to prepare now.

Have an honest conversation with your loved ones

Having transparent financial conversations with family can be frustrating and uncomfortable. If you must approach the holidays on a budget, communicate your gift expectations to your loved ones in advance. Here’s a simple script you can use or modify to better suit your comfort level:

“Hi family! We wanted to get ahead of ourselves before anyone starts shopping! The (insert last name) family has decided not to buy Christmas gifts for anyone outside of our home. We hoped that by sending this message it would help ease the stress others may be feeling about holiday spending. If you decide to buy gifts for children, we ask that you avoid toys. Children have too many of them. Instead, we ask you to stick with it. to books or clothes (Insert children’s name) – size (specify size). We would like to point out that having an adult present is a gift to each other this year. Please let us know what you think along with all of you!

You can also use Artificial intelligence technology to create and modify the script according to your needs.

Plan a separate budget for holiday gifts

The easiest way to prepare for the holidays is to save up money for the rest of the year in a separate savings account. I prefer to use Ally for my sinking fund needs because it makes it easy to save for different events or seasons through the savings account basket system.

If you’re like the average American and plan to spend $900 this holiday season, set aside $300 for the next three months to pay for those transactions. By saving small amounts over the next three months, you won’t panic when the statements come in in January. Slow and steady savings win the race.

Focus on experiences, not things

Often, material items purchased at big box stores end up in landfills, sometimes right after the holiday season ends. Giving a physical object is more common culturally, but you can always forego the gift of material objects and instead prioritize the gift of a collective experience.

Examples of group experiences include a family vacation, a visit to an aquarium or zoo, an outdoor adventure or excursion, a theater performance, a movie date, or a concert. By giving experiences, you are giving the most valuable and non-renewable resource we have: time. You also create memories with the people you value most.

Put a lid on the gifts

Keep spending under control by limiting the amount of money you spend on gifts. Set a spending limit For every adult, focus on giving gifts only to children, draw names to reduce the number of people you’re shopping for, or even try gift-free shopping this year.

You can also create a theme for your gifts. For example, every year my partner and I give one book to each adult member of our family. This way everyone knows what to expect and we don’t have to find a unique gift for every adult.

Improve the quality of your home gifts

Handmade gifts They don’t have to be low-quality projects that will see trash in a couple of weeks. You can make a thoughtful and sophisticated homemade gift with just a few ingredients, a printer, and time. Some of my favorite homemade gifts are vanilla extract, limoncello, candles, soap, and jam.

You can also give homemade desserts, decorations, or restoration books if you have those skills. Think outside the box and remember that what really matters is what’s behind the project.

Don’t pay interest on this year’s gifts on next year’s income.

It’s easy to get caught up in the fun of the holiday. Knowing your spending limits during the giving season will help you avoid debt and financial stress next year.