Follow These Steps To Start Planning For Holiday Spending

Here are some steps to avoid that costly strategy, especially in a year where money may be minimal.

If you think this holiday shopping season will be similar to all of the rest, think again. The coronavirus pandemic led to record job and income loss, which leaves many families with less money in the bank for holiday gifts.

2020 is a year where you’re better off planning for holiday spending, so you don’t surpass your budget and get the most bang for your buck. Follow these steps to achieve those goals.

1. Make your holiday spending plan now.

While we are close to Christmas, it’s never too late to create a spending plan so you have enough cash for your holiday budget.

To make your plan, think of how much you can afford to spend this year. You can use last year’s holiday expenses for reference, but be sure to include much more than just gifts.

For example, here are some things that can dwindle your holiday budget and should be included in your calculations:

• Food
• Parties
• Decorations
• Travel

Once you have your total spending estimate, divide by the number of weeks left until you plan to start shopping. For instance, if you won’t go shopping until eight weeks from now and you plan on spending $1,000, you’ll need to save $125 per week.

How can you save that extra $125 per week? We’ll discuss that in a bit.

While picking a number and dividing it by the number of weeks left works well for making a holiday spending plan, there’s another way to do so. With this second method, you determine how much money you can save per week for your holiday budget.

So, let’s say you determine that you can put away $50 per week for holiday spending, and you are eight weeks away from shopping. That would give you a $400 holiday budget, which would be your limit.

If that number is not enough, you could pledge to save more money per week or start to save earlier.

2. Figure out how to start saving or earning extra.

You now have a figure of how much money you’ll need to save per week to meet your holiday budget. Now you have to find ways to get to that weekly number.

Using the example above of $125 per week, think of unnecessary costs that are draining your bank account right now. Are you eating out a lot? If so, cutting that out and eating at home could help you reach $125 in savings relatively easily.

You can also cut out entertainment expenses, subscriptions, gym memberships, impulse purchases, etc.

If your expenses are already trimmed as it is, you can look to increase your income by getting a holiday gig, doing online gigs on Fiverr, Craigslist, or TaskRabbit, or by selling some of your used stuff online.

3. Make a list.

As your savings stack up, you’ll have to determine how to split that money up. Do so by making a list of everyone who will be getting a gift from you, as well as estimates for food, travel, and other expenses.

You’re likely to find that not everything fits with your budget. That’s not necessarily a bad thing, as it allows you to trim the fat and prevent overspending.

4. Make the most of your money when shopping.

The time has come to start shopping for holiday gifts. You managed to save your goal amount each week, leaving you with a stash of cash to spend.

To stretch that money, try the following:

• Take advantage of special sales days, like Black Friday and Cyber Monday.
• Cash in any credit card rewards you may have.
• Make your own gifts using tutorials on the Internet.
• Shop online so you can comparison shop with ease while avoiding the crowds.
• Use any old gift cards collecting dust in your drawer.