Setting Clear Financial Goals for the Holidays
If you’re on a mission to curb overspending during the holidays, chances are you will have more success if you lay out definitive goals. Being able to check your spending against established limits gives you a much better idea of your financial situation throughout the season and will be more effective than just trying to spend less.
While it may take some extra time, get granular with your goals. One great way to do this is to break out your spending into specific categories and assign limits to each category, as well as your holiday spending as a whole. Some examples of categories you can use include:
- Gifts
- Charitable donations
- Travel
- Hosting
- Events
- Decorations
- Dining out
- Post-holiday deal shopping
When crafting your financial goals, be realistic. If your goals are unrealistically tight, it can add as much stress as overspending — and you’ll be tempted to spend beyond your limits anyway. However, if you set your spending goals too high – even if you stay within budget, technically speaking, you’ll still be overspending.
How to Create a Detailed Holiday Budget
How much should I budget for the holidays? Unfortunately, the answer is: it depends. Everyone has different big expenditures during the holidays, but to get the most comprehensive budget possible, it is best practice to list every category that you may spend money on and set a monetary limit for each. Whether you prefer to use budget building apps, spreadsheets, or good old-fashioned pen and paper, tracking what you spend and comparing it to your budget is crucial.
When setting budget limits for your spending categories, it’s important to consider all the details. As an example, let’s take five of the categories from the list in the previous section and break down the considerations that need to be made for each.
1. Gifts
Make a list and check it twice, noting everyone you want to buy a gift for, and set a dollar limit for each person. Search for deals on gifts, and remember, you don’t have to use the full budget for each person — the perfect gift will be appreciated regardless of the amount you spend.
2. Travel
Costs can balloon quickly when traveling during the holidays. Budget out what you are going to spend each day on necessities like food, gas, and lodging to get an accurate idea of what each day is going to cost. If you are traveling by plane, train, or bus, buying tickets early in the year and choosing less popular days to travel can help reduce expenses and help you stick to your budget.
3. Hosting
Having family and friends over during the holidays is a top priority for many, making it easy to overspend. Avoid draining your bank account, and a house full of leftovers, by creating a budget for food, drinks, decorations, and entertainment early on. If you are a baker, keep in mind that flour, butter, eggs, and sugar can add up quickly when baking for a crowd, but that doesn’t mean you have to budget a fortune to host. Options like DIY decorations, potluck dinners, entertaining board games, and holiday movies are relatively inexpensive and can give your holiday budget a break.
4. Events
Whether you’re going out to see “The Nutcracker,” heading to the movie theater for the latest holiday release, or want to lace up the ice skates for a picturesque evening, many of the most loved holiday events cost money. It isn’t always much, but it may not be in your day-to-day budget. Look for deals on tickets, specials, and more cost-effective options for holiday events and make sure you are intentionally budgeting for them.
5. Decorations
Would your holiday season feel incomplete without decorations? You aren’t alone! The atmosphere, warm memories, and traditions that involve decorating are important for many people. The only bad news is the cost of decorations can add up quickly. From lights to wreaths to ornaments to trees, you can spend big in no time at all. If you’re looking to stay within your decorations budget, a little planning can go a long way. DIY decorations take time but are much less expensive, and if you can hold off until January, next year’s decorations can be purchased at budget friendly discounts you won’t be able to find during the peak of the holiday season.
Smart Tips for Saving Money During the Holidays
The holidays are ripe with deals and discounts but finding the best ones — while avoiding the price hikes in other areas — can be tricky. Check out a few of our favorite methods for saving over the festive season:
- Keep an eye out for travel deals all year. Snapping up a plane or train ticket at a low price early can help you save big as the holidays roll around.
- Choose gifts that are meaningful, not just expensive. This could include family heirlooms, framed photographs, or other keepsakes.
- Keep a list of people you need to buy gifts for and ideas for them — if you find a great deal on a gift idea in July, buy it then and enjoy one less gift to buy during the holiday season.
- Homemade gifts and decorations aren’t just for the little ones. Taking the time to make something with your own hands will always make it special.
- Buy holiday decor, wrapping paper, and other seasonal goods in January when they are deeply discounted.
- Look for free or low-cost activities to entertain family, such as holiday festivals or free concerts. Even a night drive to look at holiday lights can create a special memory.
Staying Financially Healthy After the Holidays
Setting and sticking to your budget is the best way to ensure your finances are in tip-top shape when life returns to normal, but there are a number of other habits to keep in mind while you are in the thick of the festivities.
- Keep credit usage to a minimum. It can be difficult to always track credit spending and a handful of impulsive holiday purchases can have you paying off debt well into the next year.
- If you do use credit, make a plan to pay it off as quickly as possible to limit paying interest.
- Review your spending as it happens and immediately after the holidays. This will help you have a better idea of a realistic budget for the next year and show you where you succeeded and struggled to stay on track.
- Seek out financial advice from trusted sources, like DCU, if you are struggling to stay on budget or want further assistance in learning how to create a holiday budget that works for you.
How DCU Can Help with Your Holiday Budgeting
You don’t have to take on holiday budgeting alone! DCU has a variety of support tools and services that you can take advantage of to help make sure your budgeting is successful. Our checking and savings accounts have no monthly fees or minimum balance requirements, and we have a team of financial planning experts and a wide range of resources that can help keep your finances healthy, no matter the time of year.
Thinking of making a big purchase or taking a memorable trip for the holidays? Explore DCU’s low-interest credit options, such as our Savings-Secured loans, that can make sure you have the funds without the predatory rates of other lenders.
If you are interested in taking advantage of DCU’s services for holiday budgeting or other needs, get started on the membership process today! Questions? Not sure where to start? Get in touch with DCU and we will be happy to help in any way we can.
Make the Holidays Joyful, Not Stressful
Sticking to a budget during the holidays doesn’t have to be a pain. In fact, coming through the holidays in a healthy financial situation can significantly reduce your stress going into the new year — sounds like one of the best gifts you can give yourself to us! If you are searching for knowledgeable and trustworthy support during the holidays and beyond, consider becoming a DCU member. We always put people first and look forward to helping you achieve all of your financial goals!
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Please note, membership is required to open a DCU savings account. Visit our membership eligibility page for more information.
This article is for informational purposes only. It is not intended to serve as legal, financial, investment or tax advice or indicate that a specific DCU product or service is right for you. For specific advice about your unique circumstances, you may wish to consult a financial professional.
