After a long year, the holidays are a great time to relax and enjoy ourselves. But when money is tight, it can be hard to budget for those extra luxuries. You might not know where to start.
Read on for our best tips, tricks and resources to help you with budgeting for the holidays.
Create a Holiday Budget
If you already make a household budget, the process is the same for the holidays. Work out how much you have left over for spending, then divvy it up on what you want to spend it on. Remember, your leftover spending is what's left when you've paid all your essentials (like utilities, mortgage payments, rent, etc.).
You can manage this with a pen and paper, spreadsheet or you can use a budgeting app like Personal Capital or Mint which will help you with the math.
The best time to start is before the holiday season. This way, you'll have the longest amount of time to save. And you can enter the year-end knowing exactly how much you can spend.
Watch Your Cashflow
In addition to following a budget, stay aware of your cash situation. That way you’ll know how much money is coming in and when it’s hitting your account so you can reduce the risk of going negative or incurring bank fees.
Knowing when money is coming in and out of your account is the key to cashflow management and keeping a positive balance. Thinkflow’s tools can help you easily forecast your cashflow.
Set Limits on Spending
Set a holiday limit. This number is the most you will spend during the holidays. If you start saving early enough, this budget should be more than enough to do what you want and avoid extra debt.
Never take money from your essentials. But if you want to boost your funds, you can save by taking what you'd spend on little luxuries you may be able to forgo for a little while. And let the holidays be your reward.
But, be realistic about what you're willing to go without. You don't want to burn out trying to save. So set yourself a realistic limit and stick to it. Make up your mind to not spend more than the amount you set as your goal.
Decide How Much You'll Spend on Each Person
For each person you want to buy for, set a firm budget for their gifts. Be realistic about what things are going to cost. It helps if you work out the type of present you want to get for each person. If luxury spending is tight, decide to keep gifts minimal.
Handmade ornaments, sweet treats or knitted items are easy ways to give thoughtful gifts without spending a lot. Gifts from the heart are usually well-received.
Keep Track of Your Progress
Having your budget all laid out isn't quite enough. You need to keep track of what you’re spending to make sure you stick to your limits. Otherwise, you might end up in a messy financial situation.
Keep a running tally and cross people off your list when they're done to help you keep track. That way you’ll know how much you have left to spend at all times.
Setting up a separate savings account for your holiday spending is a good option, too. This helps you only use the money you've allocated, and not dip into your main account.
Collect Coupons & Coupon Codes
You don't have to wait for sales to get deals on gifts. If you're shopping online, do a quick search for coupon codes for your favorite sites.
Or if you're shopping in-store, check the coupons you get in your mailbox before you head out shopping. While you're looking through your mail, keep an eye out for items you're interested in.
You can then compare the prices at different retailers for your gifts. You could save a lot of money couponing.
Late November and December will bring sales, but they'll also bring crowds. Plus, that close to the festive season, there's the added pressure to get the shopping done and wrapped.
You might aim to finish your holiday shopping before "Black Friday" sales. This marks the start of the festive season, and you'll be ready for it well in advance.
Sales happen throughout the year and you won't be facing the same demand. You can sign up for email alerts from your favorite retailers, so you'll know when their latest sales are.
Not only can this save you money, it'll save you time and stress. So make the most of it, prepare early, and avoid the rush coming into December.
Resist the Urge to Splurge
Gifts aren't the only thing that make the holiday season fun and enjoyable. It's easy to think that getting someone the ultimate gift is the only way to go. But it isn't.
Step away from the mindset of “you must spend hard or go home.” It could get you into deep financial trouble.
Every gift doesn't have to be the biggest, best and shiniest. You don't have to out-do yourself from last year. So resist the urge to splurge and keep to your plan.
Budgeting for the Holidays Made Easy
You’ll be well on your way to budgeting for the holidays by keeping these tips in mind.
The most important aspect of saving is to start early and keep on top of your finances.
If you want to get a personalized money forecast, try Thinkflow today. It analyzes your spending patterns to show your cashflow and balance projections, so you know exactly what you have to spend and when to save – a great tool to have going into the busy holiday season.