The magic of the holidays can be intoxicating. But, when your holiday spending busts your budget you will end-up with a hangover in January!
The music, the lights, the decorations, and of course, the hunt for that “perfect gift”.
And you can already imagine how elated your kids will be as they rip into their presents on Christmas morning.
Or, how amazing it would be to see your mom’s reaction as she realizes that you got her exactly what she wanted.
After all, as the holiday classic song says,
“It’s the most wonderful time of the year.”
However, when it comes to holiday spending — there is a dark side!
And unfortunately, your quest to bring joy to the faces of your loved ones can leave your budget battered and broken!
When January rolls around you see the results of that holiday spending splurge…
Now you feel like you’ve been sucker-punched as those holiday bills start rolling in.
That’s when you realize that your short-term holiday spending high, has quickly turned into a long-term financial consequence.
But, YOU ARE NOT ALONE!
The truth is that the average shopper racks up about $1200 in holiday debt.
To make matters worse, it could take up to five years to pay that off, especially if you’re only paying the minimum.
Ouch!
Needless to say, if you’re not careful, the holidays can become the gift that keeps on giving…but not in a good way!
On the bright side!
It is possible to still have all the gift-giving pleasure without any of the holiday spending – or overspending – guilt!
Think of this as an exercise in your financial fitness routine.
Here are some tips to get you ready!
1. Consult your budget first
There are no if’s, and’s, or but’s about it!
The holidays are not the time to get lax with your finances.
Instead, this is the time when you need to watch your money like a hawk.
Because the danger of overspending is real and constant!
Especially with the flood of non-stop advertising enticing you from every direction.
Nevertheless, you should always:
- Set a spending limit
- Pay your necessities first
- Never give in to the temptation to overspend
Remember, you control your spending, not the other way around!
Use a holiday spending budget planner.
2. Set up a holiday spending account
Having multiple accounts can sound like a hassle.
But, when you’re trying not to overspend it’s a great way to keep your budget in check.
Here are a few of the benefits:
- Name the account for your specific savings goal. For example, a Christmas fund.
- It allows for automatic deposits. Based on your budget, have money sent directly from your paycheck in small increments.
- Tracks your savings progress. You can easily see if your on target or falling short of your goal.
- Spend only what you can save and no more! If you don’t meet your goal then you’ll need to adjust your gift-buying budget.
If you’re not sold on opening a designated holiday account, that’s okay. You could always save the cash by setting it aside in envelopes.
3. Make a holiday spending list and check it twice
Now that you’ve got your Holiday budget set, next you’ll need to ration it responsibly.
Here’s how:
- Start by making your list
- Put a specific dollar amount next to each name
- Download shopping comparison apps like Flipp
These steps will be extremely important as you’re bombarded with advertisements for “the perfect gift.”
Both the fear of missing out, and the rush of endorphins from a seemingly great deal, are powerful influencers for overspending!
Keep that list handy when you shop and most importantly, stick to it!
Your list is a great accountability buddy for your budget. It reminds you not to get sucked into emotional or impulsive overspending.
Plus, if you need a little extra help this no-fail Holiday No-Debt Checklist can also keep you on track.
4. Credit Cards are the enemy
Here is some much-needed advice from a reformed holiday overspender — I’m referring to myself, of course.
When you’re trying to stick to a budget, you don’t want to be anywhere near a credit card while Holiday shopping!
Avoid them like the plague!
Seriously, bury them, burn them, or freeze them in a block of ice!
Don’t trick yourself into believing that your resistance will hold up.
All it takes is the hypnotic lure of a fantastic doorbuster deal or a ‘One Day Only’ sale to send you reaching for the plastic.
And then…BOOM!
Just like that, your budget is blown to smithereens!
5. Cash is your BFF
Okay, now I’m going to let you in on one of the worst kept secrets.
Use cash. Period!
I told you. It’s no secret! But it is one of the best ways to cut a shopping spree off at the knees.
After all, you can’t spend what you don’t have.
Plus, look at all these unwelcome things cash will never do:
- It will never let you overspend
- It will never charge you interest
- It will never ask for late fees
- It will never send you hate mail, i.e. bills
- It will also never robocall your cell phone, especially during dinnertime
In other words, if you are serious about dodging debt this year, then your old friend cash has got your back!
Simply withdraw the amount that you already determined in your budget. And commit to spending only that amount.
See, easy peasy!
6. Get a game plan early
Are you a hopeless procrastinator? Or, perhaps you’re hoping to score a great last-minute deal?
Either way, you could be playing Russian Roulette with your money.
In fact, last-minute shoppers paid an average of $400 more than their early shopping counterparts.
Do you want to know why? Because:
- You won’t have time to comparison shop
- You’ll be under too much pressure to pick something
- The gift you want could be sold out
- You could actually end up buying a higher-priced alternative
The bottom line is that if you want to do your budget a favor, then shop as early in the season as possible.
7. Think outside the Amazon box
Like I said earlier, we all know that sticking with cash to do shopping is great. But, there is still one thing that’s even better! And I bet you’ve probably never even considered it.
So what is it?
Ready?
How about — not spending at all! Gasp!
I know, shocking right? I mean seriously, whose idea was it to make the holidays all about shopping and spending money anyway?
Oh, wait, I know — advertisers, that’s who!
When you really think about it, the most meaningful and lasting gifts and memories can’t even be bought!
For example, that Christmas stocking you made for your mom in third grade that she still hangs over the fireplace. That is a meaningful gift!
Or that homemade triple-layer coconut cream cake that everyone begs for all year long.
Those are the things that people remember the most.
If you really want to make your budget happy, then there’s nothing wrong with giving your most precious gift of all — your time!
8. Bring in extra cash
What if you waited too late to start saving? Or, if your budget is already stretched to the limit? Then there’s only one thing left to do!
You’ve got to amp up your cash flow!
It used to be that your only choices were to try to pick up extra shifts at work, or perhaps get a second part-time job. But, nowadays, the internet and unlimited side hustles, can greatly boost your money-making potential.
Here are just a few quick possibilities to choose from:
- Be a Gigwalker. Make $3-$100 completing tasks for companies.
- Teach online with VipKids.
- Create your own Etsy store. A place to sell your unique creations
If none of those sound right for you, don’t worry.
You can also check out this list of 99 side hustle ideas that you can start today.
9. Don’t let your guard down with your holiday spending
Resisting the temptation to overspend can wage a war between your emotional desire to please and your practical need to save.
The problem is that deep down inside everyone wants to receive a little hero (or shero) worship for their great gift-giving skills.
Not only that, but you may not want to leave anyone out, or buy anything too inexpensive for fear of looking cheap.
Try thinking about this way:
Do you know that nagging impulse you feel to blow up your budget? Now, think about your budget as that little white angel on your other shoulder — trying to save you from yourself!
Oh, the agony of it all! Which one will win? Hmmm.
Only YOU can decide!
The Takeaway
Our desire to create those special moments is what makes us vulnerable to overspend.
But, this year can be different for you!
Because now you have the tools to enjoy the season without suffering the financial aftermath.
All that’s left to say is…
Happy Holidays!
Hi, my name is DeShena. I am a working mom, turned entrepreneur and money mindset coach. I achieved my mission of becoming 100% Debt-Free and starting a business. My goal is to help other professional women learn to crush debt AND pursue their passion.
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