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(From the Financial Literacy Blog) – While the holidays are often a happy time full of laughter, joy, and merriment, the season can become stressful very quickly. The root of this stress can sometimes be attributed to unforgiving schedules or preparing for large family gatherings. However, more often than not, the stress is a result of funding (or not being able to fund) the festive celebrations. While gifts are certainly a strain on your finances, it’s the unexpected holiday expenses that can break even the best of budgets. Here are a few expenses to watch out for:
Shipping
You’ve worked the cost of a certain gift into your budget and you’re on track. However, you procrastinated on finishing your Christmas shopping and now you’re having trouble finding that item in-store. You turn to online shopping and add the gift to your cart. All seems well until you look at your shipping options. The free and low-cost shipping options all have the item slated to arrive after Christmas. The expedited option would ensure it arrives on time, but now you have to pay more than you budgeted. A situation like this can become even more costly when you’ve waited until the last minute to do all of your shopping. With only two weeks until Christmas, now may be your last chance to save money on shipping costs. Add those items to your cart now to avoid going over budget this holiday season.
Gift Wrap
In addition to the cost of gifts, it’s important to factor in the cost of wrapping them. If you don’t already have them, you’ll need to stock up on wrapping paper, tape, scissors, tags, ribbons, bows…whatever you may want to use to present your gift. Before you know it, you’ve spent far too much on wrapping. It can become even more expensive if you have a retailer gift wrap the item for you. Amazon offers gift wrap services that start at $3.99, but become increasingly more costly as the size of the item increases. If you’re looking to save some money going forward, consider reusing gift bags each year.
Holiday Parties
Whether you’re hosting or attending someone else’s holiday party, there can be a number of expenses you didn’t plan for. If you’re unexpectedly invited to a party, you may feel obligated to bring a gift for the host. In addition, if there will be a Secret Santa, Yankee Swap, or other holiday-themed gift exchange at the party, that’s another gift you’ll need to purchase. Add in an ugly sweater competition and one holiday party could drain your budget very quickly. If you’re the host, you’ve probably already budgeted in the cost of decorations, food, and entertainment. However, what happens if you accidentally burn the turkey? You might need to quickly run out and grab a bunch of pizzas, which certainly isn’t cheap. Make sure to budget in a back-up plan to avoid spending more than you can or should.
Plan Ahead
If you want to prepare for the unexpected going forward, consider opening up a Christmas Club Account at your local credit union. Club accounts are essentially savings accounts that earn interest and help you save up for a specific purpose throughout the year. With a Christmas Club Account, you can’t withdraw the money you’ve deposited until the holiday season begins. It’s a great way to ensure that you’ll have money saved up to cover those unanticipated expenses this time of year.
Happy Holidays!