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Holiday Budgeting 101

Published: 11/05/2024
Holiday Budgeting 101

It’s easy to get caught up in the magic of holiday spending. But if you’re relying on credit to make holiday wishes a reality, the magic often falls flat when your bills come due. Take the time now to create a holiday budget and avoid post-holiday spending regret.

Be Realistic

The best thing you can do to curb your holiday spending is to set a realistic but firm budget. Most people spend around $980 on holiday merriment, according to the National Retail Federation. Planning to celebrate the holidays and being able to afford them are two different things.

To create a holiday budget, start by looking at what you spent last year. Consider the impact that spending had on your budget—for instance, were you paying off credit card bills for months after the holidays? Did you have to skip the family summer vacation because Christmas was too expensive?

Being honest about the trade-offs that you’re making with your current holiday spending will strengthen your resolve to stick with a budget this year.

Click here to start your Holiday Budget 

Evaluate Individual Expenses

As you create a budget, look at each individual expense. Try to be as comprehensive as possible. Think about:

  • Gifts for immediate family
  • Gifts for extended family
  • Gifts for friends, neighbors, and coworkers
  • Travel expenses like gas, flights, and hotels
  • Food and party supplies
  • Christmas cards
  • Postage and shipping
  • Gift wrap supplies
  • Interior and exterior décor

Add up what you plan to spend and determine whether or not that spending fits inside your budget.

Adjust Expectations

Choosing an appropriate budget may mean you need to celebrate in a different way than in years past. If this is true, have an open conversation with loved ones and let them know you need to opt out of traditional gift exchanges.

Or arrange with family to do gifts of time and service instead of physical gifts. This isn’t as exciting for younger family members, but older ones may appreciate help with decluttering or organizing spaces in their home, sifting through family photos, or another project.

Spending money on someone or something in the past doesn’t mean you must spend the same amount forever, especially if you have to go into debt to do so.

Make a List and Check It Twice

Getting organized with your gift giving can help you take advantage of holiday sales and get the best prices on items. Keep track of your gift list and spending (there are apps for this!).

You can also research to find the best price on popular items. A few minutes searching can save you lots of money.

When you’re finished shopping, stop looking at fliers, email promotions, deal websites, and in-store sale signs. That way you won’t be tempted to buy whatever amazing deal pops up next.

Plan for Next Year

If you’re tired of feeling the holiday pinch, start saving for next holiday season now by starting a Holiday Savings Club. At Fairmont FCU, there is no minimum balance required, no payment schedule, no minimum deposit to open and penalty-free early withdrawals on Holiday Savings Clubs.

Once you have a Holiday Savings Club, break your targeted budget into doable chunks, whether that’s a daily, weekly, or monthly deposit amount. Finding $5 or $25 in your monthly budget is a lot easier than trying to find $300 or $600 when the holidays roll around. Even if you only plan to save half of the amount, you’re still doing your future self a favor.

Want to create your own Holiday Budget? Fairmont FCU is here to help! Click here to visit our Banzai Financial Literacy website and build a Holiday Budget that fits your lifestyle.

Resources:

https://infogram.com/1pmn7gg7ygm3rkf3e1lk670m9wtzvem25w2

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