The holiday season is a wonderful time of the year where we can spend time with our family while we eat our favorite food, share stories, and just have fun. But with the coming of the holidays comes the advent of the season of giving. Sure, it’s fun receiving gifts, but it can be stressful when it’s your turn to give.
Holiday spending is something that can hurt our finances if not done right, with all the retail stores and shopping malls rushing to give out all sorts of promos and discounts to take advantage of the holiday spending rush. Because of that, people always tend to overspend when it comes to doing their holiday shopping.
Before you go rushing over to the retail store to buy gifts for your family and make the holidays as cheery as you can, consider these spending habits that you should learn in order to avoid going over budget and regret your decisions when the holidays are over and you’re back to reality.
Holiday Spending Tip #1: Don’t Buy Something You Don’t Need
Because of all the promos and sales given out by retail stores this time of the year, it can be tempting to take advantage of the sale and buy everything you want or may need in the future with the goal of saving money on future expenditures. But that can be counter-productive since you’ll still be spending a lot of money to “save” a lot of money.
Look at it this way: you saw a $1000 phone with a 20% discount, but yours is already working. Most people would look at it as a $200 discount. But in reality, you just spent $800 on something that you didn’t really need. If the purchase was planned right in time for the holidays, you can go right ahead. But if it wasn’t, don’t do it.
Holiday Spending Tip #2: Set a Budget per Person
The first thing you should do when holiday gift shopping is to limit the amount of gifts you’ll be giving. You don’t have to give gifts to everyone you know. If the opportunity arises, you can ask your friends or family if you can forgo exchanging gifts because you’ll just end up exchanging gifts of the same value. Make a list of all the people to whom you want to give gifts. Keep the list short.
Once you’ve whittled down your list of gift recipients, determine how much you’re willing to spend on gifts and then as each person’s gift is purchased, deduct it from that person’s budget. Keep it as low as possible. That way, you get to save money on gifts, and you get to have a good time choosing creative gifts within that budget.
Holiday Spending Tip #3: Use Cash as Much as Possible
One way of telling you’re going over budget is by bringing the right amount of cash you’re willing to spend when shopping and only using cash to pay for items. Don’t use your cards – credit or debit. It can be very difficult to keep track of your spending when you use cards because you can’t physically see the amount you’re spending. Stick to a cash budget so you can easily keep track of your expenses.
Holiday Spending Tip #4: Avoid Shopping Sprees
Retailers are very good at enticing people to spend and over spend over the holidays. They make sure everything you see is enticing enough to make you give up your cash – everything from display placement to lighting and music. What’s more, they do a very good job of keeping your spending momentum with all of these great offers they’ve got lined up. You can avoid going on a shopping spree by making a list and sticking to that list. If you get an urge to buy something that is not on the list, step out of the store for a few minutes until the urge disappears, or simply move to another store.