If you’re not careful, it is rather easy to spend a lot of money at this time of the year. First, there are presents—and if you have kids or a large family—spending can get out of control. And then there are the things no one really thinks about that are associated with the holidays: decorations, wrapping, parties, gift exchanges with friends or co-workers, trips to visit family, and mailing costs.
Soon, it’s the New Year, and you have done it again—you’ve overspent.
But there are ways to make sure you can stop that from happening, if not during this holiday season, then for next year.
Budget. Budget. Budget. This is the best way to avoid overspending for the holiday season. While creating a budget, consider two things: make sure to account for all the presents you will need to buy; and add in any extra items such as postage, wrapping items, parties, and gas expenses for trips. With a budget in mind, make sure to stick to it closely.
Consider Starting a Holiday Fund. This is likely one of the easiest ways to save up for the holiday season. Many financial institutions, including credit unions, offer special holiday funds in which you can put away as little as $10 a month (though you may want to consider putting in a little more). Most won’t allow you to touch the funds until the holiday season begins, usually in November.
Expand Your Income. Consider ways to increase your income. You could sell some of those unused or unnecessary items you have laying around the house to bring in some money. Or you could get a part-time job if you have the time to do so.
Say No to the Plastic. It is very easy to overspend when you use credit cards, or even if you use a debit card. Several studies have found that people tend to spend more when they use plastic than when they use cash. So, think about using cash only while holiday shopping. See how that changes your behavior … and spending habits.