By Chris Dato • November 13, 2014
One of the most common causes of holiday headaches is trying to stick to a budget. It always seems like, no matter how hard we try to avoid it, the cost of Christmas always manages to sneak up on us. What can you do to achieve your goal of not overspending this shopping season? Here are just a few secrets for sticking to your holiday budget.
When it comes to keeping spending down during the holidays, cash is king. I have discussed in previous articles some of the credit building perks of plastic for your seasonal shopping, but nothing beats cash when working on a budget. Cash has a unique quality when it is in your hand that credit cards do not, which makes it much harder for most people to spend as freely. Simply seeing the cash go from your wallet to the register is a great motivator to not overspend. Another time-tested technique is to set aside a little cash each week into a gift fund. This fund is known as a “Christmas Club,” which is a term that comes from similar bank programs during the great depression. Instead of putting the money into the bank, make envelopes the people on your list and put the amount you want to spend inside. This is also a great way to get an idea of exactly how much you should expect to spend when calculating your budget.
Make a List
You know how they tell you to never go grocery shopping while you are hungry? The same principle applies to Christmas shopping. Go into each store with a clear picture in mind of who and what you are shopping for, as well as a solid idea of how much you want to spend. In this scenario, the Christmas club envelopes will really come in handy. The goal is to avoid impulse buying, as stores try to take advantage of the bewildered mindset of seasonal shoppers and having a list handy will help greatly. This is not to say that you should not buy any gift that is not on your list, but simply be conscious of impulse buying traps.
There are quite a few advantages to shopping online for the budget conscious. The biggest benefit, of course, is that you can often find items for a lower price by looking online. Not only is this true of exclusively online retailers such as Amazon, but also for companies that have brick-and-mortar locations. Shops like Barnes & Noble’s offer better prices for the same product online versus in-store. Many retailers will also run sales and specials that are exclusively online. You also don’t have to worry about availability for online items, which can be a problem in-store, especially as you get closer to the end of the season. Online shops are also open 24 hours, so you can get your shopping done no matter how crazy your schedule is. Also, be sure to take advantage of the free shipping many places offer during winter, especially if the recipient doesn’t live close. Consider having the gift shipped directly to its final destination. Finally, stay conscious of impulse purchases. Between the discounted prices and the “You might also like” recommendations, it can be easy to get distracted and blow your budget.
Find an Alternative
Sometimes simply buying a gift is not the best option. If you are really struggling to make ends meet, consider clever alternatives to traditional gift giving. One of my personal favorite examples of this is organizing a “Secret Santa.” With 62 people in my extended family (and that is just on my mom’s side!), buying a gift for every person would leave me homeless come January. Instead, we have a Secret Santa drawing each year to see whom we are going to buy for. Then, we have a celebration where we all have dinner together and exchange gifts. A Secret Santa exchange can be much more than just a way to alleviate holiday budgets, and has itself become one of the most beloved annual traditions for my family.
Making gifts is another great way to celebrate the spirit of giving without breaking the bank. Handmade gifts are more personal than simply buying something off a shelf, and can be a great opportunity to show someone how well you really know them.
Chris Dato A Southern California kid born and raised, Chris is happiest with sunglasses on his face and sand under his back. Although a self-proclaimed master money saver, he prefers the term 'responsibly frugal' to 'cheap.'