The holidays are here once again, and as the old saying goes, ’tis the season to be jolly…right up until your credit card bill comes. Between family activities and presents, the holidays are a prime time for goodwill to get in the way of good financial habits! If you have found yourself spending more than anticipated during the most wonderful time of the year, you’re not alone. In fact, the National Retail Federation predicts the average American will spend almost $1,000 on holiday shopping this year.
If you are determined to get your spending under control this year, we can help you avoid the dreaded holiday financial hangover in January. Read on for our five best tips for taking control of your holiday expenses!
1) Set Up a Holiday Budget
You may not realize it, but the weeks leading up to the holidays are the perfect time to review and adjust your budget! Specifically, you’ll want to look at your current spending and saving habits to decide just how much money you can afford to spend this season. That way, you not only set some hard limits on spending, but you’ll be able to embody the holiday spirit without stressing about finances.
Make sure to factor in the hidden costs of the holidays while making this new budget. For instance, holiday cards, mailing costs, decorations, and gift wrap will all impact your bottom line.
Feeling extra committed to your financial health? Instead of thinking about setting a spending limit, try thinking about it as a spending goal. Reaching a limit feels constricting, whereas reaching a goal feels uplifting—much more in line with the season! For example, instead of setting a maximum limit of $600 for gifts, try to set a goal of spending only $600. This way, you’ll think twice about how your holiday expenses factor into your goals, and feel some holiday cheer when you stick to them.
2) Make a List and Check It Twice
Santa may give everyone gifts on the nice list, but that doesn’t mean you have to! Once you have your holiday budget, make a list of all the people you want to purchase gifts for. Then, take a few moments and think about who you need to buy a gift for and assign a dollar amount to each of them. If it isn’t necessary to get someone on your list a present, go ahead and put them on a separate list.
After you’ve divided people into your “needs” and “wants” lists, do something small but thoughtful for those you had to cross off your initial gift list. Baking cookies or making personalized ornaments are big-hearted ways to spread cheer but are not bank-breaking. See more about creative gifting in tip #5 below.
Once you’ve bought a gift for someone on your “needs” list, make sure you take them off of it. This will make sure you stick to your budget and avoid last-minute additions to already great gifts.
3) Always Browse for the Best Deals
Whether you’re looking for the best deals on gifts for the family, new appliances for holiday feasts, a big-screen TV to keep everyone entertained, or the latest-model smartphone for the kids, it’s essential to know when and where the sales will be held. Before making any large purchases, do your online research: compare prices between stores and look for coupon codes. Websites like RetailMeNot.com and Rakuten.com can help save time when looking for the best deals. A little effort now means more money in your pocket come January 1st!
4) If You Must Borrow, Borrow Wisely
In a perfect world, we would all emerge from the holiday season completely debt-free. However, for those of us who didn’t have a chance to save up for holiday expenses or who have credit cards with high interest rates, heading into next year debt-free may be difficult.
If this is the case, you may want to consider taking out a personal loan for the holidays to cover those additional costs. Personal loans typically offer lower interest rates than most credit cards, and their one fixed monthly payment makes it simple to factor into your budget. Additionally, personal loans have an exact date for repayment. While credit cards may seem like the more appealing option with their monthly minimums, it’s easy to get stuck paying those smaller payments. By falling into the minimum payment cycle, your holiday debt will take longer to pay off and end up costing you more in the long run.
5) Get Creative With Gift Giving
A tight budget doesn’t mean you need to feel like a Scrooge. When it comes to gift-giving, the holidays are the perfect time to think outside the (gift) box and get creative!
Homemade from the Heart
If you can’t afford the latest and great gifts, why not add a personal touch to your holiday shopping list by making some gifts yourself? If you have a hobby like knitting or woodworking, now is a great time to get inspired and show those special people in your life that you care. Saving money while spreading joy? Sounds like a win-win to us!
Instead of gifts for each person on your list, try giving one thoughtful gift per family or couple. For example, seek out an affordable subscription box service or a gift card to a local restaurant that everyone in the household can enjoy.
At the end of the day, the holidays are about celebrating with the ones we love the most. But if you struggle with holiday expenses, it can be hard to remember the true reason for the season. That’s why Credit Direct offers personal loans up to $40,000 to help you cover the expected—and unexpected—costs of the holidays.
Apply online in minutes to check offers with no effect to credit score.