The fun and frenzy of the holidays could leave you financially frazzled. Saving money all year in a “Christmas account” at the bank may be the best way to budget for gifts and travel, but–let’s be realistic—not everyone does that, and even when we do, holiday budgets often get broken.
According to Financial Engines, an independent investment advisor firm, 30 percent of the 1,000 consumers they surveyed in broke their holiday budget last year and 21 percent predict they will go over their budget this year.
Holiday presents aren’t the only expenses. Travel for a family visit or the cost of hosting your friends and family are other common holiday costs. The following checklist can bring on a cheerful New Year instead of a post-holiday hangover.
Holiday Budgeting Tips:
- Carefully compare travel options. While a direct flight to Grandma’s may be the quickest, check out connecting flights, trains or buses. Driving and ridesharing options might also help lower your travel costs.
- Bring your own snacks. Airport food and drinks are notoriously expensive, so if you do fly, pack a lunch and snacks and bring a refillable water bottle that you can fill from a post-security water fountain.
- Make a list and shop early. Nothing wrecks a holiday budget faster than a last-minute shopping frenzy. Make a list of who you need to buy gifts for, decide how much you want to spend on each gift and keep track of your total gift budget.
- Don’t shop for yourself – yet. If you rarely shop during the rest of the year, you may be tempted to pick up items for yourself while you’re doing your holiday duty. Resist buying now and make a wish list for January sales.
- Organize a Secret Santa gift exchange. If you’ve got a big family or a wide circle of friends to shop for, see if you can organize an exchange to limit the number of gifts you need to buy.
- Consider a communal party. If your home is the perfect place for parties but you don’t want to foot the bill, ask your guests to bring the supplies so you can cook or bake together or host a traditional pot luck gathering.
- Serve your friends dessert and champagne. A full-on dinner party or even heavy hors d’oeuvres can add up quickly, but if you switch to the best part of the meal (dessert) and serve it with inexpensive sparkling wine cocktails, you and your guests will have sweet memories of your party.
If You Blow Your Holiday Budget…
You could consolidate debt with a personal loan. If you’ve overused your credit cards and store cards and are spending more on interest payments to creditors than on gifts for the people you love, a personal loan could be the best way to start the New Year. A personal loan can be used to consolidate debt into a fixed payment while lowering your interest costs.
If this year’s holiday spending isn’t as controlled as you’d like, start planning for next year by setting aside a little money each month in a special account so you’ll be ready when merrymaking season comes around again.
Curious what the average person spends on Christmas? Find out!