The holiday season is fast approaching and along with it the hustle and bustle (and financial stress!) of gift giving. With a little strategic planning, you can have the upper hand on how it impacts your wallet and your budget.
While it’s tooted to be the most wonderful time of the year, it can also be one of the most expensive. Did you know that Americans typically spend $1,000 or more each year on holiday gifts, decorations, entertaining and other expenses during the holiday season? You may be surprised to learn that almost a quarter of that is spent on food, and only a tenth of the total is spent on self-gifting. If you are like many Americans who live paycheck to paycheck, a thousand-dollar plus increase in spending is a substantial budget increase for just a few months’ time.
Let’s take a look at simple tips for smarter holiday spending:
Review Last Year’s Holiday Spend
When you think about budgeting for holiday expenses, do you only factor in the cost of purchasing gifts? If so, this may be where even the savviest budgeters get off track. Look at your credit card and banking account transaction history for October through December last year and add up every holiday related expense that you wouldn’t normally accrue in a holiday-free month. You will likely be surprised with all the extra holiday expenditures on your statement.
Don’t Forget To Budget for Holiday Tipping
An often forgotten expense during the holiday season is the cash tips many give to nail salons, hair salons, garbage collectors, dog groomers and even Amazon Drivers. Take special note of ATM withdrawals for cash tips and don’t forget extra entertainment expenses such as theater tickets, grab bag gifts and holiday travel expenses.
Make Your Gift-Giving List, Trim It as Needed
Now that you’ve taken a deep dive into the real cost of celebrating the holiday season, think back to your list of people outside your immediate family that you purchased presents for. One easy way to dramatically cut spending is to limit the number of people you purchase store-bought gifts for.
If you have a less than robust gift-giving budget, set a max, your two to five dearest friends will get purchased gifts, while everyone else on your list will get a plate of your homemade holiday cookies (or whatever else you’re known for)! After picking your list of gift recipients, sit down and map out a realistic budget for how much you’re willing (and more importantly, able) to spend on each. A good rule of thumb in choosing friends to give purchased gifts to is simple: Is this a friend that reciprocates in the gift-giving? While it’s not a hard and fast rule and may seem a bit “scrooge-y,” continuing to purchase gifts for friends that do not share in the joy of giving might be the ones you give the plate of home-made fudge to. Of course, if that friend has been especially supportive this past year or has had a lot of personal challenges, by all means add them to your gift list. And remember, sometimes hand-made gifts from the heart are more meaningful than store bought gifts, so don’t be afraid to give heart-felt, simpler gifts to your friends and even family members.
Boost your holiday savings with no-spend days
Think of this as a spending cleanse right before the season of swiping commences. Pick two or four days out of the week and mark them in your calendar as no-spend days. This means no extra spending on ordering take-out, going to the theater, shopping online, or on Uber rides. Meals are prepared with food you purchased at the grocery store and you’ll want to skip your morning dash to your favorite local coffee shop. Your wallet and your budget will appreciate the break from the holiday spending frenzy!
Request Gift Lists Early
Saving and spending goals are all about making larger, pricier purchases more manageable over as many weeks or months as possible. Once you’ve set your gift giving budget, ask your friends and family members for their wish lists a few months in advance. While you’re at it, discuss spending limits upfront as a family so you can manage expectations and you won’t be tempted to go overboard as you shop.
In the meantime, be on the hunt for sales that may pop up before Black Friday. They seem to sneak up earlier and earlier as the years go by. Don’t be afraid to commit to a gift early if the price is right and you have allocated holiday money ready to spend.
Did you forget to plan a Gift-Giving Budget or forget to start a Christmas Savings Plan? PFCU is here for you with the Holiday Cash You Need
PFCU has mortgage Solutions to get you through it! Pacific Federal Credit Union is partnered with Right Choice Mortgage, offering a versatile and cost-effective range of loans to our PFCU members:
- Home improvement
- Lower your interest rate and loan term
- Reduce your monthly payments by consolidating debts
As your credit union family, we want to look into your unique financial situation to help guide you in the way that best fits your needs. If you’re in need of cash for the holidays or any other reason, we’re here for you. We will give you the tools you need to meet your goals.
Call Right Choice Mortgage at:
MORTGAGE DIVISION (888) 297-7353
Start A Christmas Savings Account for the Upcoming Year
Click here to learn more about starting a Christmas Savings Club Account for 2022.
About Pacific Federal Credit Union
Pacific Federal Credit Union is a member-owned, not-for-profit, financial cooperative serving the financial needs of more than 1,721 members. Our goal is to offer our members the best rates and the finest financial services available today, along with friendly, personal service. We are able to do this because of the unique, non-profit, cooperative nature of credit unions. Credit unions are “People Helping People” organizations, and our philosophy is “Not for profit, not for charity, but for service.
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