It’s that time again. The most distracting season of the year.
The holiday shopping season can eat you up and spit you out if you’re not careful. Ads disguised as gift ideas and big ticket items tied up with bows can make it seem almost mandatory to spend, spend, spend.
Don’t get overwhelmed because creating a plan and following it can make all the difference.
Start a gift list
No this doesn’t need to be a naughty and nice list, just one that outlines everyone who needs a gift from you. Family, friends, co-workers or neighbors all might have different expectations, but make a list and then estimate how much that gift should cost. If you don’t have set gift-giving guidelines then estimate or choose how much you’ll be spending.
If you have a list of everyone with an estimate of how much those gifts will cost, then guess what? You already have the start of a budget. You can head to the Mvelopes app and create different envelopes for each category you’re wanting to track. Dad, mom, kids, Santa, neighbors, you’ll know where you stand on everyone’s gift buying with a glance at the Mvelopes app.
Making a budget is a great first step, unless your second step is to simply throw it out the window once you set foot in a store.
The T. Rowe Price Parents, Kids & Money survey for 2016 found that 58 percent of parents never stick to their budget and 64 percent spend more than they should have. That’s two out of every three people spending more on gifts than they intended.
Holiday shopping has its exclamation point on Black Friday, but not everything in every store is discounted on Black Friday. Even things on sale, might have better prices the week before or the week after. The only way to know if you’re getting a deal, especially on bigger ticket items, is to comparison shop and look at price histories if you can find them.
If you’ll be spending a lot of money on a single gift then it really does pay to figure out the price you should pay for it and wait to find that price or a better one. It may mean finding an alternative gift or having a backup plan, but it would also mean you won’t be overspending.
Getting all your gifts in one day usually isn’t a possibility and by the end of that day you’ll be more interested in finding the item than finding the best price on it.
Split up when you buy gifts in order to not get sucked into grabbing things off the shelf. If you started buying gifts in October or even back in the summer, you’d be ahead of the game come December. You would have extra time around the holidays to spend with family instead of hopping from store to store looking for gifts.
Make your own presents/decorations
When your money gets tight or in order to get a better bang for your buck, making presents or decorating with DIY ideas can make your money last.
Homemade gifts aren’t for everyone, but there are plenty of people on your list who don’t need something grand, especially since it’s the thought that counts.
Plan some time to bake, decorate or craft and you’ll have gifts that you can’t find in a store, plus you’ll have that much more money in your pocket for making merry.
Save for gifts before spending
Imagine if you couldn’t buy gifts if you hadn’t already saved money for them. How sparse would under your Christmas tree look? It may be too late now, but starting to save for gift spending in January makes it easy at the end of the year. Even starting in July would provide you with a great headstart. It would also avoid an unnecessary interest added on top of what you already plan on spending.
The T. Rowe Price Parents, Kids & Money survey also found that 25 percent of parents have taken money out of their emergency fund, retirement account or taken on a payday loan to cover the cost of gifts.
Imagine either the missed interest, the added interest or the need for that money later just because you didn’t plan or didn’t adhere to your plan. Put together a saving plan to give yourself the best shot at hitting your target.
Don’t be afraid to make adjustments
When your finances start to look iffy or when you’re already past your limit, don’t be afraid to adjust your target. Your regular monthly spending can be a source of extra gift money if there are things you can do without in order to get just the right gift. If you have extra savings and deem it worthwhile in regard to your financial goals then use that.
The important thing is to avoid looking to credit to solve your problem of not having money. America added twice as much money on credit cards in the final quarter of 2015 than they had the rest of the year combined.
Part of the problem is not taking into account just what putting all that money on credit actually means. According to Google Trends, searches and clicks on items related to credit card debt and credit repair have increased on average by 60 percent the last five years once Christmas ends and the New Year begins.
The other scary part of using credit during the holidays is that people tend to tune it out. Credit card debt and credit repair have their troughs during the end of November and into December. So people care the least about it when they’re shopping and the most about it immediately after.
Don’t cause yourself the added stress come Dec. 26 and avoid using credit to make up for the money you don’t have. Plan to spend within the limits you set.
Need to set up your budget before Christmas? Enroll for free in Mvelopes to take control of your money and have a happy holiday season.