According to the National Retail Federation, holiday spending in 2019 grew by 4.1% from the previous year – landing at a whopping $730.2 billion. Holiday spending statistics like this one tell us that Americans, in general, are spending incredible amounts of money around this time of year.
But you don’t have to enter the new year with a busted budget and an empty wallet to keep up. There are plenty of ways to enjoy a happy, financially healthy, and meaningful holiday season that doesn’t involve going broke. Taking time to look at your holiday budget now and plan accordingly will keep you on the right path and will help prevent expensive surprises as we get closer to Christmas and other gift-giving holidays.
Many people use the 50/20/30 budgeting method, which allows you to allocate 30% of your post-tax income to wants. If you’ve already established a budget that defines your limits for your wants, you should have an idea of how much you can use for holiday spending. If your budget needs some attention, grab a coffee and take some time to break it down now. You’ll be happy you did when you successfully come in under budget on your holiday spending, and you have more than enough left for your needs and investments.
In a normal year, a holiday spending list might include items like airline tickets, hotel rentals, and large family dinners. While your holiday spending list might look a bit different this year, chances are good that there are still quite a few items you’ll be shopping for. Make a list of any holiday-specific grocery items, decorations, gifts, and whatever else you include in your holiday spending, including prices.
If you know what those expenses are from previous years or recent online research, be specific. If you’re not sure just yet, take a look now or write in an estimate. Just remember that it’s better to overestimate than to underestimate. Next, highlight the items you want to prioritize. When you add visuals, you make it easier to spot any items on your list that you can cut without taking anything away from this special time of year.
DIY décor and gifts have grown in popularity recently. In the last few years, in particular, this trend has grown tremendously. Homemade decorations and gifts are unique, affordable, and thoughtful. They also give you something fun and creative to do as the weather dips outside. Put together baskets of homemade gifts and baked goods instead of splurging on pricey items that may be forgotten within a few months.
Pinterest is overflowing with manageable DIY crafts, decorations, and gifts for every occasion. And homemade gifts will not only save you money, but they tend to be more meaningful, too. If you’re set on focusing on more frugal purchases rather than homemade gifts, go for creative and affordable items like memory-filled photo books or frames, fuzzy socks or warm blankets, and kits filled with snacks for their next cold weather movie night.
If you’re crafty, you can break out a notebook and colored pencils for a fun, festive, and frugal holiday spending tracker. Otherwise, a simple Microsoft Excel spreadsheet or a Word doc will do. Keeping track of what you’ve spent and how much you have left in your holiday spending budget line will help you stay on course. And creating a holiday spending tracker or holiday spending chart is an easy way to ensure that you avoid overspending.
If you’ve cut, prioritized, and DIY’d to your heart’s content, but your holiday spending budget line could still use some padding, you’re not out of luck just yet. Thankfully, there are plenty of different ways to make money online and earn a little extra income to add to your holiday spending. Most of the time, all you need is your computer and a strong Wi-Fi connection.
Things like transcribing videos require minimal training and can often be done on your own schedule. Offering freelance services is another easy way to make extra money. Depending on what skills you already have or which ones you’re interested in learning about, you can offer assistance with writing, editing, or updating resumes, virtual tutoring, or proofreading. If you’re strong and live in a northern climate, you can offer shoveling services. Whether you choose to employ one tactic on this list or all of them, making smart financial decisions can help make your holiday season less stressful and more enjoyable.