How can you avoid overspending during the holiday season? Let’s find out!
It’s easy to throw money here and there for the holidays. This is the time of year when many of us ramp up our spending to buy presents for all those special people in our lives. You may even spot some good deals for yourself while you’re shopping, and pretty soon, without realizing it, you’ve spent way more than you intended.
While the holidays are a great time to give back and show others how much you care, staying within your budget and keeping your spending in check can also take effort and time.
Last year, the consumer planned to spend, on average, about $1,000 on holiday shopping. As you may guess, that number is expected to increase this year, given the rising inflation we’ve been experiencing.
But don’t worry! There are some ways to avoid overspending during the holiday season, and we’ve made sure to talk to some personal finance experts so they could give us their input on the matter. Let’s get started!
1. Take a realistic look at your finances
According to experts, one of the best ways to avoid overspending during the holiday season is to take an honest look at your current financial situation. The idea is, based on your income, to determine what you feel comfortable spending on gifts.
Financial experts we’ve spoken with said that you shouldn’t be spending more than 1.5 percent of your annual income on holiday presents. In other words, you need to ensure this figure works for your budget.
If you think you may be able to swing a higher budget, that’s great! But it’s important to be honest about what you can afford and what you cannot. Don’t be afraid to scale down. Holiday gifts shouldn’t make a hole in your wallet. Spend what genuinely works for you, and you’ll avoid overspending during the holiday season.
Here’s a budget planner where you can organize your finances!
2. Decide on an amount and stick to it
So, once you know how much you can spend, decide that this is the maximum amount you can spend on gifts. One way to stick to your budget and avoid overspending during the holiday season is to get that exact amount in cash so you can know exactly how much you have at all times while you’re going shopping.
If you’re more like an online shopper, keep a spreadsheet with the exact amount you’re spending on each present. You could take it a step further and allocate spending ranges for each person on your list.
As long as you’re keeping track of exactly how much you’re spending and how much money you have left, you should have no trouble staying within your budget.
3. Compare prices
Comparison shopping is easy to do online. You just have to check out multiple ships at once to determine which store offers the best deal on any item.
When it comes to shopping in person, most people think it takes a lot of time to step into several stores to compare prices. We agree with them, and that’s why we have a better idea. Once you’re in a store, pull out your phone and price-check an item. You’ll know if the product is available somewhere else at a lower price.
Now, we know it’s easy to feel rushed into making a decision while in the store. However, this can easily wreck your holiday budgeting goals. So, be a savvy shopper and ensure you’re getting a great deal. Not only will it help you avoid overspending during the holiday season, but with a bit of luck, you could even end up saving money.
Saving $10 here and there can add up when purchasing presents for many people.
4. Make a list of recipients
Another way to avoid overspending during the holiday season is to make sure you have a list of every person you’re shopping for. If you go shopping without a list, you’re more likely to blindly pick up a few things without knowing exactly who to give them to.
That’s why making a list of people you want to give a gift to and a few ideas of what would make a good present for each person will help you avoid overspending during the holiday season. Perhaps you only purchase gifts for a few close friends and your immediate family. Make them a priority and stick to only buying presents for those people.
Even if you spot something that would be perfect for someone else, keep in mind that you’ve only set aside money for the people most important to you. If you really don’t want to leave certain people out, you can make homemade gifts, bake goods, or send personal cards to those who you aren’t purchasing a gift for.
Keep reading to discover other tricks to avoid overspending during the holiday season!
5. Look for cash-back deals and coupons
No. 5 on our list of ways to avoid overspending during the holiday season is to use coupons and look for cash-back deals. There are lots of deals waiting for you on coupon sites and easily installable apps and browser extensions.
For example, Brad’s Deals is a website you can check to see plenty of handpicked sales going on. It also gives you the option to receive notifications when sales are happening at your favorite brands. There’s also Rakuten, a browser extension that allows you to earn cash back when you make purchases at certain brands.
Once you register for a Rakuten account, you can link it to your PayPal account and collect cash back every time you shop at brands like Macy’s, Kohl’s, and Sephora. Rakuten also provides access to coupon codes while you’re shopping online.
6. Pay for the necessities
Paying for your necessities first is one of the best ways to avoid overspending during the holiday season. It’s easy to get caught up in the holiday vibe; you’re excited that the most wonderful time of the year has begun, and you start buying presents. You get carried away, and, without realizing it, you wind up spending more than you have.
That’s why, when planning your holiday budget, it’s important to always pay your necessities first, such as debt payments and bills. Doing this can help you avoid overspending during the holiday season and reduce some of the stress associated with this time of year.
7. Don’t fall for retail tricks
Last but not least on our list of ways to avoid overspending during the holiday season is to recognize the marketing tricks through which stores try to entice you into spending more money.
During this time of the year, retailers rely on several strategies to make customers add more stuff to their shopping lists. For example, if you’re throwing products in your online shopping cart just to avoid the shipping fee, then you’re falling for one of their many tactics! According to personal finance experts, simply paying for the shipping service is less money than whatever you added in at the last minute.
Watch out for the sales, too. Although you read “up to 70% off” on the sales signs, this means maybe only one product in the entire store is 70% off, while the rest are just 20%.
If you liked our article on ways to avoid overspending during the holiday season, you may also want to read Cashback Apps Are Amazing! See Here a Top With the Best and Worst Ones.
