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- Bundling gifts for groups of people can save you time and money and give them a bonding experience.
- Put money in a high-yield savings account year round that you set aside for purchasing gifts.
- Set a deadline for when you’ll have your shopping done, and take advantage of deals on Black Friday.
The holiday season can be a happy time for many. It is a season where we spend lots of time with family and friends. However, what many consider to be the most wonderful time of the year can also be the most expensive.
With the holidays around the corner, it is important to create a plan for your holiday budget. As a financial planner, here are seven strategies I recommend to help ensure your budget covers all your holiday shopping expenses.
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1. Itemize your holiday budget
The first step to avoid going overboard on holiday spending is to set a budget. Determine how much you can afford to spend on holiday shopping without compromising your financial well-being.
In addition, it may be helpful to specify how much you plan to spend per individual or family. This will help to create some boundaries to ensure that you stay on target with your budget.
Also, make sure that you plan for any additional expenses that you may incur such as decorations, food, and donations.
2. Set shopping deadlines
One thing that I have learned about holiday shopping is that last-minute gifts are much more expensive. Make it a goal to have all your shopping done by a set deadline.
By being proactive you can take advantage of seasonal deals on Black Friday and Cyber Monday to save on gifts.
3. Have a separate high-yield savings account earmarked for holiday shopping
Once you’ve crunched the numbers and created a holiday spending budget, it is a great idea to create a separate savings account earmarked for holiday shopping. To plan ahead and avoid taking on debt, automate your savings to this account each month or pay period.
Another benefit to using a separate high-yield savings account is that your money will be working for you. This could increase the amount of cash available to use toward holiday gifts or for yourself.
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4. Bundle gifts
One of my favorite ways to save on holiday shopping is to bundle gifts per family or group. As an example, instead of buying individual gifts for a married couple, I purchase a joint gift that they both can enjoy. This can save you both time and money.
Some ideas for couple or family gifts include games for family game night, a projector for movie nights, edible gifts to enjoy together, or gift cards for date night.
5. Exchange gifts for experiences
Have you noticed that it becomes more challenging every year to come up with a gift idea for someone you have known for a while? This creates a stressful situation each year where we shell out money for a gift that the recipient may not even enjoy.
Consider joint experiences with family instead of purchasing gifts for each other. As an example, you could choose to spend $500 on a cabin trip with family instead of spending $700 on individual gifts.
6. Find creative ways to reduce other expenses in your budget during the holiday season
In an ideal world, you would have enough money to cover all your holiday expenses. However, life does not always work that way. If you find yourself a little short on cash to cover your holiday expenses, consider reducing other expenses to create cash flow.
Maybe you can settle for watching only Hulu and Netflix for a few months and temporarily cancel some of your other subscriptions. Or maybe opt for homemade lattes some days over Starbucks.
7. Compare prices across retailers
To get the most out of your holiday spending, look for the best deals and compare prices before making a purchase. Consider signing up to receive emails or texts from your favorite retailers to never miss out on a sale. Sometimes with a nice discount, you could spend significantly less on a gift for someone than originally planned.
Then you could reallocate those dollars to someone else. In addition, if you are purchasing any gifts online, make sure that you are factoring in any shipping and handling costs.
And remember, the holiday season is meant to be a time of joy, peace, and happiness. Gifts are nice to have, but not at the detriment of our financial well-being.