The holidays are a wonderful time of year, but let's be honest—they can also be pretty expensive. From buying gifts and decorating your home to entertaining guests and attending holiday parties, it's easy to let your spending get out of control. But don't worry! With a little bit of planning and preparation, you can enjoy all the holidays have to offer without breaking the bank. Here's how to financially prepare for the holidays:
Step 1: Create Spending Boundaries
The first step in preparing for the holidays is to create healthy spending boundaries. Sit down and figure out how much money you can realistically afford to spend on gifts, decorations, food, and entertainment. Once you have a number in mind, stick to it! It may be tempting to overspend when you're surrounded by holiday cheer, but resist the urge and stick to your limitations. Your bank account will thank you later.
Determine How Much You Can Afford to Spend
The first step is to determine how much you can afford to spend. This will help you to avoid overspending and getting into debt. To do this, take a look at your income and expenses and create realistic boundaries for yourself. Then, set aside a specific amount of money that you can afford to spend on Christmas gifts and decorations.
Make a List of Who You Need to Buy Gifts For
Once you have determined how much you can afford to spend on Christmas, make a list of who you need to buy gifts for. This will help you to stay within your limits and avoid buying unnecessary gifts. When making your list, be sure to include everyone who you would like to give a gift to, such as family members, friends, co-workers, etc.
Step 2: Start Saving Now
If you know you'll be spending more money than usual during the holidays, start setting aside money each month to prepare for the additional expenses. This will help you avoid going into debt or having to rely on credit cards come December. You can open up a dedicated savings account for your holiday expenses or simply set aside money in your existing account each month.
Plan Ahead for Travel Expenses
If you're planning on traveling to see family or friends during the holidays, start booking your travel arrangements as early as possible. Not only will this save you money, but it will also give you peace of mind knowing that your travel plans are all set. If you're driving, be sure to factor in the cost of gas and tolls into your budget (and plan for some extra holiday traffic!). Especially during this season of high gas prices, it's important to plan ahead so you don't end up spending more than you can afford.
By being proactive and organized, you can make sure that your holiday travel is both enjoyable and affordable.
— Fiat Wealth Management
Step 3: Don't Wait to Buy Gifts
One of the biggest mistakes people make during the holidays is waiting until the last minute to buy gifts. Not only is this stressful, but it often leads to overspending as well. If possible, start buying gifts throughout the year so that you're not stuck trying to find affordable presents at the eleventh hour.
By spreading out your holiday shopping, you can take advantage of sales and discounts, and you'll be less likely to impulse buy expensive items simply because you're short on time. In addition, starting your shopping early will give you a better idea of how much you can spend, so you can avoid going into debt during the holiday season. So next year, don't wait until December to start your holiday shopping - your wallet will thank you.
Step 4: Keep Track of Your Spending
The holidays are a wonderful time of year, but they can also be a budget-buster if you're not careful. According to a recent survey, the average American will spend $967 on Christmas gifts this year. If you're not watchful, it's easy to let your spending get out of control.
Make a list of everyone you need to buy gifts for, and set a limit on how much you're willing to spend on each person. Once you've done that, do some research to find the best deals on the items on your list. One of the easiest ways to track spending during this stressful season is to use a budgeting app or spreadsheet to keep track of your expenses. Some of the most popular apps include:
By following these simple tips, you can keep your holiday spending under control and avoid going into debt.
Step 5: Get Creative with Gifts
Christmas is a time for giving, and that means finding the perfect gifts for your loved ones. But what do you do when you've run out of ideas? If your go-to gift is a gift card or a pair of socks, it might be time to get creative. Here are a few ideas to get you started.
One option is to give a experiences instead of physical gifts. This could be anything from tickets to a show or a gift certificate for a day of spa treatments. The goal is to give your loved ones something they'll remember long after the holidays are over.
Another idea is to get personal with your gifts. This could mean making something yourself or finding something that captures the essence of the person you're giving it to. For example, if your best friend is a cat lover, you could find them a personalized cat mug or an adorable pair of cat-themed socks.
No matter what you decide to give, the most important thing is that your gifts come from the heart. So take some time to think about what would make your loved ones smile, and get ready to make this Christmas one to remember.
Step 6: Christmas Decorations on a Budget
There's no need to break the bank when it comes to decorating your home for the holidays. Get crafty and DIY some of your decorations—you'll be surprised at how much fun you have in the process! If DIY isn't your thing, try finding festive decorations secondhand at local thrift stores or online marketplaces like Craigslist or eBay. You can also take advantage of holiday sales at big-box stores like Target or Walmart—just be sure to stick to your budget!
Preparing for the holidays doesn't have to be stressful—or expensive. By making a budget and getting creative with your gifts and decorations, you can enjoy all the joys of the season without breaking the bank. So go ahead and spread some holiday cheer—your wallet will thank you later.
Holiday Financial Sense From Fiat Wealth Management
We asked one of our financial advisors, Daniel Colvin, his thoughts on holiday preparations and here is what he had to say!
The holiday season is meant for spending time with loved ones and creating memories. Unfortunately, the holiday can also be financially stressful as people buy gifts for loved ones. A simple solution to mitigate that stress is budgeting. I recommend that families start their holiday planning in the beginning of the year. Ultimately, a budget should be looked at annually as life changes along with the economic environment and this year, inflation has put a dent on budgets around the country. I suggest planning forward and start saving incrementally over the year into a "Holiday Account" that can be tapped into for gift shopping.
Oftentimes, it’s not just during the holiday season that can be stressful financially, for our best tips and tricks to deal with financial stress, check out our blog!
This page is a publication of Fiat Wealth Management, LLC. The firm is registered as an investment adviser and only conducts business in states where it is properly registered/notice filed or is excluded from registration requirements. Registration is not an endorsement of the firm by securities regulators and does not mean the adviser has achieved a specific level of skill or ability.
The information presented is believed to be current. It should not be viewed as personalized investment advice. All expressions of opinion reflect the judgment of the authors on the date of publication and may change in response to market conditions. You should consult with a professional advisor before implementing any strategies discussed. Content should not be viewed as an offer to buy or sell any of the securities mentioned or as legal or tax advice. You should always consult an attorney or tax professional regarding your specific legal or tax situation.
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