The holidays can be an incredibly fun and exciting time, but they can also be a nightmare if you don’t know how to keep a firm grasp on your spending habits. It’s easy to get carried away, particularly if you have grand ideas about what you want to buy your loved ones or the kind of celebrations you’d like to host for your family. When you add together the cost for all the gifts, travel expenses, and food, you can end up in a serious financial hole by the time January comes around.
With so many expenses to think about, it’s important to make sure that you have a plan of action in place to guide you safely through the festive season. Here, we’re going to look at what you can do to create and stick with an effective holiday budget.
1. Start with a List of your Expenses
First of all, start just as you would with any budget, by listing the expenses that you expect to tackle in the months ahead. Try thinking back to the last festive season for an insight into how much you typically spend on things like decorations, gifts, and other necessities. If you don’t have as much money to spend this year, this will also help you to see where your problem areas are when it comes to managing your cash. If you notice any areas where you’re prone to overspending, you can think about putting strategies in place that will help you to cut back.
For instance, if you spend a lot of money on festive food, consider asking your friends and family to bring some of their own favorite foods this year so that you can cut down on your spend.
2. Choose Your Spending Limit
With your list of typical costs in front of you, think about what you can reasonably afford to spend. This year. If you’re planning for an upcoming vacation, or you want to put a deposit on a house in the year ahead, then you probably can’t afford to go as crazy with your spending as you did in previous years. With that in mind, give yourself a limit and stick to it.
If it helps, make sure that you only buy the things you want for the holidays with cash. This way you’ll be less tempted to go over-the-top just because you can swipe some plastic to get what you want.
3. Think Carefully About Loans
If this is a big year for you. For instance, you’re hosting a family get-together for people that you haven’t seen in years; then you might be tempted to go above and beyond with your celebrations. As such, there’s a good chance that you’re going to need some extra cash.
Consider your loan options carefully if you decide to borrow so that you can spread the cost of these holidays out over the next year. Remember, there are countless different loans available out there, and you’ll need to ensure that you get the one that’s right for you, with the lowest possible interest rate.
4. Make a Shopping List and Split your Budget into It
With your realistic budget set and your idea of how much you need to spend in each category in mind, it’s time to start dividing your money up across things like food, decorations and so on. Having a set amount aside for each thing will help you to stick to your budget.
It might help to create shopping lists for everything you’re going to need to buy over the next couple of months. This will give you plenty of time to compare the price of things that you need online and make sure you don’t overspend if you can avoid it. Remember to always take your shopping lists with you to the grocery store when it comes to food too. The festive season is a time of indulgence, and we’re all prone to buying a little too much food.
5. Track Your Spending
Finally, make sure that you always keep track of how much money you’re using. While counting every penny over the festive season might not sound like a lot of fun, it’s the best way to ensure that you don’t accidentally go too far with your purchases. At this time of the year when your emotions can easily get the better of you, it’s always a good idea to take a logical approach to dealing with your money.