Budgeting: Holiday Budgeting Advice
Provided by Visa, Content Partner for the SME Toolkit
When it comes to giving gifts, entertaining, hosting holiday parties, for many it actually means overspending and financial stress. Setting a realistic holiday budget and making sure we stick to it are the first steps to a more affordable and less stressful season. Use the tips and tools below to enjoy holidays without letting holiday spending get the better of you.
1. Set Your Budget
The best way to start making a holiday budget is to look at your spending during last year's holiday season. In what areas did you spend more than planned? Next, make a list of the holiday purchases and events you plan to spend money on this year. Consider all of your major spending categories like gifts, entertaining, meals, and travel and then estimate how much you can afford to spend in each category. Have a "micro budget" – a specific spending limit – for each person on your gift list. Many financial planners recommend spending no more than 1.5 percent of annual income on holiday expenses.
Knowing your spending goals long beforehand will help you stay on track financially as the season heats up. This easy-to-use Holiday Budget Calculator can help.
2. Get Creative
One great way to save money and impress friends and family is to get creative. Store-bought gifts are great, but homemade gifts are often more meaningful and most recipients truly appreciate your time and effort. Ideas for creative gift projects are plentiful online.
3. Trim your list.
Do you really need to exchange gifts with everyone in your family? Consider cutting your list back this year. Or suggest giving a group gift to certain members of your family rather than individual gifts. Just because you had a long gift list last year doesn’t mean you need to repeat it this year. You may find that other members of your family love the idea.
4. Join Together
Instead of excessively spending money on each other this year, join together with family members to help those who may be less fortunate - donate the money for those in need.
5. Travel Wisely
If you plan on traveling, take some time to determine how much it will cost you with this Holiday Travel Planner.
6. Entertain for Less
Holidays are a wonderful time to entertain, but a little planning and budgeting can help you avoid financial headaches. Let this Holiday Entertainment Planner help you ensure a fun event that won't tax you financially.
8. Enjoy the season.
In the end, the holidays are all about enjoying friends and family. Staying focused on time with loved ones and other joys of the season can help you to keep stress in perspective. If you are hosting holiday parties at your home, use this Entertainment Planner to plan for the costs. Rather than feeling obligated to host an event every year, suggest a rotation for who will host holiday gatherings. And remember that it’s much better to keep spending down and stick to your budget. It’s a great feeling to start off the new year on the right financial foot.
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