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(From the Financial Literacy Blog) – The holiday season is upon us, and with that comes ample opportunities for showing the special people in our lives that we are thinking about them. Of course, this can be done in a variety of ways, but many opt for indulging in shared experiences, carefully shopping for the perfect gift, and/or getting creative with handmade/homemade presents. Depending on budgets and the number of people you are looking to celebrate this giving season, it is crucial to set yourself up for financial success. The following savings tips can help guide you towards a practical, stress-free season with loved ones, allowing you to fully soak up all the holiday joy and cheer amidst engaging in gift-giving, dinners, parties, and other celebrations and activities.
Create a Gifting Philosophy
Before you begin deciding what you would like to do for/with your friends and family, it is important to consider who you’d like to celebrate with, how you’d like to accomplish that, and why. Assess why you want to buy presents and what the goal of gift-giving is for you personally. Is it about finding the perfect gift for each person? Are you basing your choice to give presents off a feeling of obligation? Determining what is motivating you can shape your overall goals for the holiday season.
Set and Stick to a Budget
Once you’ve narrowed in your motivation, one of the most critical steps to take is to create a holistic budget for the season—including any activities and celebrations you’d like to participate in, donations you want to make, and any gifts and wrapping you hope to buy—that you will follow. It’s tempting to get excited and go overboard but take extra care to only budget what you can truly afford based off your income. The holidays can cause financial strain but try not to feel pressured to do more than you can; this will likely ultimately cause more stress than merriment as you navigate the next couple of months—and possibly after if you wind up facing debt.
It is helpful to write down everything you hope to do, as well as compile a list of who you want to shop for and what you’d like to get for each person. By beginning your shopping with an overarching idea of what is slated for the holidays, you can shop smarter and make more financially-sound decisions. Track all of your spending against your budget, and rein in spending in other general areas (such as subscription services, going out to eat, and personal spending) if it will help you achieve your holiday goals.
Agree to Spending Limits
To avoid feeling uncertain about how much to spend on a person, consider setting spending limits—at least with some of those on your list. By agreeing on a spending cap ahead of time, you can rest easy knowing that you are collectively shopping within each of your means. This avoids any discomfort around overspending or underspending and can even provide better guidance on what items to shop for within the set budget. Talking about money can be uncomfortable but setting clear and realistic limits around gifting can actually create a more comfortable and enjoyable environment for the upcoming seasonal gatherings.
Get Creative With How You Gift
Gifting does not have to be complicated! There are many ways to save money while still showing your circle of loved ones that you care and are thinking about them. With larger groups, consider suggesting a Secret Santa or Yankee swap. Typically, with these types of gifting, a spending limit is set across the board for all participants to follow. You can even opt to set a theme to inspire shopping!
Additionally, contributing to a group gift is an excellent and convenient way to do more for someone when working within tighter budgets. For example, a group of siblings may decide to combine their resources to get a bigger ticket item as a gift for their parents. While they may not have been able to provide such a gift individually, group gifting opens opportunities that may only be attainable collectively.
Lastly, many people adore handmade and home-baked items. Don’t be afraid to get crafty and use your skills to your advantage. There are ample ideas to create your own gifts and/or gift baskets, such as making baked goods and crafting personalized items, and many of these options don’t break the bank. Handmade presents often tell the recipient that you took time out of your day to sit down and make something special with them in mind, and it can have a more heartfelt impact—especially if it’s one-of-a-kind.
Give Your Time
A great way to celebrate during the holidays is simply to spend time with loved ones. In fact, making memories and sharing experiences can sometimes mean more to the recipient than a physical item. Attend a holiday-themed orchestra, play, or ballet; set aside time to journey through the light display at the Coastal Maine Botanical Gardens; grab dinner and catch up over a nice, warm meal; volunteer at nursing homes, soup kitchens, and/or other local charity organizations; attend a paint and sip experience (or have one at home with your own supplies); make holiday crafts together; host a holiday movie night with hot chocolate and your favorite snacks—the options are endless!
Spending your time rather than your dollars is a wonderful way to “gift” during any holiday season, but it is extra helpful for those who may not have the means to shop for presents. If money is tight, simply showing up and being with one another is just as special—if not more—as any gift. Shared experiences can even become a new holiday tradition in place of presents.
Shop Deals and Discounts
It’s no secret that the holiday season also brings holiday sales, deals, discounts, and coupons. Take advantage of these offers as you plan your spending. One of the biggest sales of the year is just around the corner (hello, Black Friday) and most retailers provide steep discounts on highly sought-after goods. Purchasing during sales can help save you quite a bit of money as you navigate the holidays. If shopping deals, prepare and plan ahead so you know what items to buy and stick to that list; purchasing any unnecessary or off-list items adds up.
Sell Unwanted Goods
Another great way to help cover holiday costs is to assess what you already have for a little extra cash. Clear up space in your home and budget by selling any unwanted items you have laying around. This can help offset increased expenses around this time of year, subsequently easing your mind and wallet.
Avoid Borrowing Money and Increasing Debt
It’s important to do your best not to take on more debt for the sake of the holidays. Increasing credit card use just to cover added costs will likely leave you feeling overwhelmed and financially stressed, as that is money you will need to pay back eventually. If you don’t have the money to pay for it now, it’s best to avoid the expense altogether. This is largely why creating and sticking to a budget is important for both your overall success and joy this holiday season.
Plan Travel Ahead
Travel plans can certainly be last-minute, but if you know of plans far enough in advance, make your arrangements as soon as you can—the sooner the better. Hotels and flights may be essential for visiting friends and family, but the costs tend to be much steeper around the holidays due to the increased volume of people utilizing these services. The earlier you know about your need for travel accommodations, the earlier you can begin tracking and pricing out options and the more likely you are to score a deal. Booking arrangements close to when you’ll need them can lead to higher costs—sometimes just enough that it’s no longer feasible.
Start Early for Next Year
It is never too early to begin thinking about next year. Start tucking away savings at the beginning of 2025 and continue doing so throughout the year to position yourself where you’d like to be for next year’s season of giving. The earlier you start to plan, the more likely you are to be where you hope to be financially when the time comes.
Ultimately, remember to enjoy this season! Making the most of the season starts with meeting yourself where you are at, making a reasonable (and responsible) budget, and allowing yourself to experience the holiday cheer in ways that are important to you.