With Christmas and New Year just around the corner, you may now be expecting your wallet to empty up. You’re likely on a break from school or work and spending more time with your family and friends, going to different places to celebrate. Overspending during this time is typical, though not advisable.
If you’re guilty of any of these common financial blunders due to the holidays, then it’s time to learn some holiday budget tips.
1Not keeping or sticking to a budget
Creating a budget is a necessity, whether it’s the holidays or beyond. When you have no means to guide and track your expenses, you can go over the line and spend on unnecessary or unplanned purchases, especially during occasions.
If you do have a budget, stick with it. There may be different factors and temptations along the way, such as a coveted item being on sale. But with a spending cap in mind, you can avoid impulse purchases.
2Not planning for the holidays
You have 11 long months to prepare for Christmas, but you chose to cram all of your holiday expenses on your December salary. Unless you have a six-figure income, you’ll understandably fall short.
Avoid this mistake by planning your holiday. Know what you want to do, list down your projected expenses and amount, and save early on. It will also help to create a gift list, and decide the maximum amount you can spend on each present. Adjust your budget along the way, if needed.
3Relying on your yearly bonus
You cannot depend on the windfall to pay off all of your holiday expenses. Chances are, having twice the amount of expenditures because of the occasion will once again make you fall short. Again, something as simple as saving throughout the year can help you through the holidays.
4Not comparing prices
One of the best things about this time of the year is the numerous discounts and deals that you can enjoy. This may sound like a total temptation for you to overspend, but that’s only if you didn’t allocate enough for shopping. Take this chance to check out the offers and see if you can buy gifts at lower prices.
Do your research before checking out. You can do this by window shopping and comparing prices from one store to another, including online shops. Naturally, go for the store that offers the lowest possible cost to save money. Do not be duped into paying more than you need to.
5Not opting for low-cost traditions
Every family has a Christmas or holiday tradition that they want to carry on every year. Then, there are those who want to elevate the custom. If your family’s expectation is to have something different every year—unplanned or not—expenses can go out of control.
It’s time to accept that not every holiday needs to be extravagant. Sometimes, the simplest of experiences can make the biggest impact, especially if you’re living it through with the ones you love. Plenty of practical ways to do something new or different would still allow you to create lasting memories. You can try baking holiday treats, revisiting your hometown or rekindling connections.
Christmas season is a time to make relationships better and not to put yourself in a huge financial problem. Learn to celebrate within your means and have enough to survive the days after the holidays.
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6Author: Patrick Zulueta
Patrick is the Head of PR and Communications of Cashalo, a financial services marketplace where you can borrow and lend right on your mobile phone.