According to the recently released annual survey on holiday spending, 38% of consumers plan on spending less this year compared to last year.
Sounds promising, right?
Unfortunately, Bill Hampel, chief economist for Credit Union National Association, said intentions to spend less rarely reflect the reality of consumer behavior.
Every year, by a large margin, respondents state they plan on spending less. Yet, holiday spending has increased throughout the 16 years the survey has been conducted, except for two years during the Great Recession (2008 and 2009).
Instead of getting caught up in the frenzied spending of the season and hoping an intention to spend less will keep your wallet safe, why not prepare your finances and create a buffer beforehand?
Here are a few ways you can give your budget a break before jumping head first into the holiday season.
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Find 5 Ways to Make Room this Month
Sometimes creating a successful budget means shuffling funds from one spending category into another. Allowing for this fluidity means you can have more of what you want – as long as you are willing to sacrifice in other areas.
Think about it: holiday spending is a large burden on one month’s spending if you haven’t prepared ahead of time. This usually means credit card bills will be creating a nasty spending hangover come January.
Don’t wait for that. Instead, think of five ways you can cut your spending throughout the month of December in order to keep your budget in tact. For me, this will mean canceling two subscription services (both of which don’t provide enough value for the cost), cutting my grocery budget (holiday leftovers are hugely helpful), selling a bridesmaids dress, cashing in on credit card rewards and nixing alcohol purchases at restaurants and bars.
Decide on No-Spend Days in December
If you have even one competitive bone in your body, create a money challenge for yourself by designating certain days as “no-spend days.” The benefits of this are many:
You’ll be forced to plan ahead of time.
No more random stops at the grocery store – all necessities will need to be purchased before your no-spend day.
You’ll be forced to be very intentional with your spending.
No more impulse purchases you don’t remember later – you will need to be very intentional about what you buy and when.
You will make room in your budget in a relatively painless way.
Instead of cutting out specific line items in your budget, no-spend days help you cut out mindless spending and save in the process.
Reconsider Your Holiday Parties
During the holiday season spending pressure doesn’t just come from buying gifts. Hosting and attending parties can be another hugely expensive endeavor.
Last year spending on attending holiday events cost an average of $310, hosting an event was around $194, and buying attire for said events was at $144. For most, this is simply not manageable.
Before you get swept up in the spirit of the season, consider how you will cut back on these costs this year.
Do a clothing swap with a friend.
You might not want to wear last year’s outfit to this year’s party, but that doesn’t mean you have to go out and buy a new one. Ask a friend to do a clothing swap instead – you can wear hers and she can wear yours.
Reconsider your hostess gifts.
Instead of coming with an expensive bottle of wine in hand, find a thoughtful gift you can make instead of buy. Think food gifts or one of the million creative gift ideas you can find on Pinterest.
Ask for help with your party.
Most people are aware of the huge amount of work it takes to be a killer hostess. Instead of brushing it off when people offer to bring something, let them come with a side dish or dessert to share. It will make your life easier and give your wallet some breathing room.
Create a Plan of Action
Maybe you already have a gift list in hand and a general idea of what you want to buy for each person. Take this time before holiday shopping gets underway to make a comprehensive plan of action.
Find out when is the best time to buy each gift on your list.
Both RealSimple and the Washington Post have outlined the best days to make specific purchases online. Take note and decide when you will be making your purchases.
Find out where you should be making your purchases.
PCMag has compiled a list of the best price comparison apps and Lifehacker talks about price comparison tools that can help when you’re browsing for items online. Being an educated consumer can help you cover everyone on your list without going overboard.
Break down your budget by gift recipient.
If you have an overall gift giving budget in mind, that’s great. But now you need to break it down by recipient. Knowing the amount you need to stick to for each person will ensure your total spending doesn’t inch higher and higher with each gift.
How do you plan on making extra room in your budget this holiday season?