The holidays are right around the corner, which means so is the need for a holiday spending plan. Without a plan, many people end up spending far too much during this time of year. Your spending plan will be like your holiday budget, and it will help you temper the speed and degree to which you spend your hard-earned money this holiday season.
The first step, however, is to free up as much of your income as possible before you start swiping. For example, if you have an outstanding debt, check out a loan payoff calculator to see if you can get rid of it beforehand. This will put you in the best possible position to act on these five steps for creating your holiday spending plan.
1. Map Out Your Projected Holiday Expenses
A great way to get started is to find out exactly how much money will go to anticipated expenses. This will comprise everything from your rent or mortgage payment to utility bills, which will be more expensive if you put up lights and turn on the heat. One often overlooked expense is the sometimes dramatic change in grocery costs for the holiday period due to holiday meals or hosted parties.
2. Set Limits & Stick To Them
You will need to set spending limits on the gifts you’ll be buying, and while those limits should keep you under budget, they should also be realistic. A modest guideline would be $20 to $50 on gifts for friends and $100 to $200 for those in your immediate family.
To help you set these limits to realistic levels, think about what you spent last year and how you’d like to adjust that. Looking back, if you overspent, be sure you set limits that are lower than what you previously spent or buy for fewer people.
3. Prioritize, Allocate, Adjust
This is going to be incredibly important for those who have long lists of people to shop for. If you are shopping for 50 people, for instance, you aren’t going to be spending your total gift limit on each person. Once you have your list, prioritize, adjust, and reallocate your funds until you have a gift plan that keeps you in line with the total amount of money you have to spend.
4. Keep Your Eyes Peeled
The two months leading up to the major gift-giving holidays are always packed with deals and sales. Be sure you are monitoring appropriate outlets for sales and even set alerts on your favorite shopping apps so that you get the best prices for your gifts. Browser plugins like Honey can also help you leverage coupon codes from across the internet.
5. Keep Track
Reigning in your holiday spending doesn’t end with your spending plan. Once you start, be sure you’re tracking what you’re spending and not just who you’re shopping for. This will give you a better overall picture of your success in sticking to the plan.
Creating An Effective Spending Plan For The Holidays
Each year it seems like the holidays get more and more expensive. By taking some time to prepare a spending plan with these steps, and then making a conscious effort to stick to those preparations, you can reduce the regret that can sometimes show up around January.