Holiday budget and saving tips

Overview:

A great holiday doesn’t have to mean overspending. When creating a holiday budget, consider everything you may need for the season, such as gifts, food decorations and travel. This could help you create a spending plan by category, which can make it easy to see where your money goes. Additionally, smart shopping strategies can help holiday saving, such as comparing prices, looking for sales and using coupons. Small changes can help you stick to your budget and enjoy the holiday season without stress.

The holiday season brings joy, but it can also challenge your wallet. Americans plan to spend an average of $1,107 on presents this year, making it important to consider a holiday budget. Use these tips to create a budget for the upcoming holiday season.

1. Plan ahead

The holiday season can sneak up fast, so it's important to start planning your holiday budget early. This gives you more time to look for deals, spread out your purchases and avoid last-minute stress.

The earlier you plan, the more options you'll have for saving money during the holidays. By beginning your holiday budgeting several months in advance (even as early as January), you can help keep spending on track.

Set up a holiday savings account

Regular deposits into a holiday savings account could help reduce financial stress when the holidays arrive, and some banks even offer bonuses for consistent saving throughout the year.

Complete the 52 week challenge

You could save $1,378 through the year to spend on the holiday using the 52 week challenge: $1 the first week of the year, $2 the second week and add a dollar ($1, $2, $3) each week through $52 on week 52.

2. Consider your total holiday spending

While about 71 percent of American holiday budgets go for gifts, holiday spending often includes decorations, wrapping supplies, travel, parties and meals. Still, there are ways to manage these non-monthly expenses.

Create a spending plan by category

Divide your holiday budget into categories such as gifts, food, decorations and travel. By breaking expenses down, you can track your spending and find ways to save. Here are some saving tips for common holiday categories:

• Gifts — shop during sales, use coupons and consider homemade or personalized presents.
• Decorations — reuse decorations from last year or buy new ones after the holidays when prices drop.
• Travel — when planning a trip, book early to get lower rates on flights and lodging, and use rewards points to save. Make a list of transportation, lodging and food costs so nothing surprises you.

Cut costs for holiday meals and entertainment

Holiday feasts and house parties can get pricey, but you can still create great experiences on a budget. To reduce costs even further, consider these holiday saving tips:

• Buy in bulk at warehouse clubs.
• Hosting a potluck so everyone contributes a dish.
• Using affordable ingredients for meals that can stretched for leftovers.
• Look for grocery store promotions and coupons before your shopping trip.

Set expectations

• Talk with your family about gift plans. For children, consider a simple rule such as “ask for something you want, something you need and something creative” keeps costs reasonable.

Consider eco friendly holiday tips

Another way to keep your holiday budget under control is by being environmentally friendly. Here are some ideas to help you get started:

• Pay attention to packaging — try to purchase gifts with the least amount of packaging. If you're shipping presents, save some extra money by creating your own packing materials using eco friendly products such as recycled newspaper and shredded paper.
• Offer some gifts unwrapped — the gift of time or shared experiences such as tickets to a show or a sporting event create meaningful memories, and no wrapping paper waste.
• Lose the disposables — the holidays are a special time of year, so pull out the china, stemware and cutlery. Not only will this add a touch of class to your party, but it could also reduce the cost of shopping trips and the amount of trash.
• Opt for LEDs — according to the U.S. Department of Energy, LED lights use at least 75% less energy while also lasting up to 25 times longer than normal Christmas lights. Save even more energy and help reduce your bill by using a timer to shut lights off automatically.

3. Consider smart shopping strategies for holiday saving

When finding ways to save money during the holidays, saving early gives you more time to compare prices, find deals and carefully track your spending. Also, buying gift cards at a discount from warehouse clubs lets you stretch your dollars further.

Be strategic when holiday shopping. Planning a Secret Santa or white elephant gift exchange can relieve the pressure to buy multiple presents, especially for large groups. You could also set a spending limit to help ensure everyone sticks to their holiday budget.

Utilize rewards and loyalty programs

The bonus points that you accumulate through credit cards, airline travel and hotel stays could add up to a gift or two. Cash in your available points to "purchase" a gift for someone on your list.

Some retailers offer bonus gifts with purchases. For example, if you buy perfume, you might get a free travel-sized item to give someone else.

Take advantage of technology for deals and budgeting

Technology can help you save on holiday spending. Try these tech tools:

• Budgeting apps to monitor holiday expenses.
• Price comparison sites to find the best deals.
• Coupon apps and browser extensions for automatic discounts.

Stretch your holiday joy throughout the year

Remember, holiday gift-giving doesn’t have to happen all at once. Save a few dollars by giving someone a subscription to a publication that he or she will enjoy throughout the year.

By using these holiday budgeting tips and saving strategies, you can help make your holidays joyful, memorable and affordable, without overspending.