8 Money Management Tips for the Holiday Season

Posted on Dec 1st, 2020

8 Money Management Tips for the Holiday Season

The holiday season is quickly approaching, which means buying gifts for your loved ones, planning holiday meals and decorating your home. During the 2019 holiday season, retail sales totaled $730.2 billion, and the average person planned to spend $1,048 on gifts, decorations and food. If you’re wondering how you’ll afford to buy all the gifts and other holiday necessities without getting into debt, you’re not alone. As the 2019 holiday season got underway, one-quarter of parents stated that they were still paying off debt from the 2018 holiday season.

Figuring out how to save money for Christmas involves making a plan and deciding to stick to it. You can also change the type of things you buy to save money during the holidays. Instead of going for the fanciest gifts, focus on presents that are meaningful to you or the recipient. These holiday-time saving tips will help you avoid getting into debt and minimize financial stress during the season and afterward.

1. Set Your Budget

The first thing to do to get your holiday spending under control is to create a budget for gift shopping, food shopping and other purchases you’ll need to make during the season. When making your holiday budget, start with a list of every anticipated expense. Think about how much you want or can afford to spend on gifts for your family, friends, and co-workers. Also, list all of the food and drink you’d like to buy and the anticipated costs, as well as the expected costs of any new holiday decorations you buy.

Once you’ve listed all of the expenses you anticipate during the season, add up the total expected cost. Then, compare the total expenses or cost to what you have saved up for the season or what you can comfortably spend from your monthly budget. You might have to trim your planned holiday spending at this point so your anticipated expenses line up with the amount of money you have available.

You can get a jump on the holiday season by setting up a savings account specifically for holiday purchases earlier in the year.

2. Create a Shopping List

Once you have your budget and an idea of how much you can spend in each category, such as food, gifts and decorations, it’s time to build your shopping list. As you make a shopping list, rank your purchases in order of priority. If you’re hosting a holiday meal, you’ll need to include food for that meal on your list. But if you’ve received invitations or expect to get invited to multiple holiday parties, you might need to pick and choose which ones you attend and for which you want to buy a host gift.

Also, prioritize the people you buy gifts for when making your list. You most likely want to buy gifts for your kids, closest friends and other close relatives. But, depending on your budget, you might cut gifts for co-workers or distant relatives off of your list. Alternatively, you can set a price limit for gifts based on how close you are to people.

More importantly, once you have your list and price limits for each item or person, stick to it. Committing to purchasing only the items on your list will keep you from going over budget this holiday season.

3. Include Your Needs on Your Shopping List

It’s easy to get caught up in the thrill of the holiday season and shop for yourself while shopping for others. There’s nothing wrong with a little self-gifting — as long as it’s part of your holiday spending plan. When putting together your budget and shopping list, include gifts and treats for yourself. Set a spending limit for your little splurges so you don’t go overboard and bust your budget.

4. Start Your Holiday Shopping Early

If you’re interested in how to save money on Christmas gifts, one of the best tips you might get is to start shopping early. Although Black Friday marks the official start of the holiday shopping season, 56% of consumers reported having already started their shopping in the first two weeks of November 2019. The earlier you plan and begin shopping, the more time you’ll have to monitor sales on items, allowing you to get the best possible price on the gifts you buy.

5. Pay With Cash More Often

Paying with cash hurts, literally. When you use cash instead of a card to make purchases, you feel a deeper connection to what you’re buying and are more likely to value it. If you find that you often overspend when you shop with a credit card, try switching to cash this holiday season instead.

Using cash will also help you better manage your spending and avoid going overboard. When you bring cash to a store with you, you can’t overspend. You can shop until you run out of physical money and then you’re done.

6. Use Money-Saving Apps

As you plan your holiday shopping, take advantage of apps that give you cashback or rebates on your purchases, whether you shop online or in-store. Some apps and websites that can help you save money when shopping include:

  • Rakuten: Rakuten gives you cashback when you shop at a wide range of online stores. The cashback amount varies per store and is usually anywhere from 1% to 10% of the purchase amount. Although most of the stores available through Rakuten are online, it does let you connect a credit card to take advantage of in-store cashback at a few retailers.
  • Ibotta: The Ibotta app offers cashback on purchases at certain retailers, similar to Rakuten. It also lets you claim rebates on a constantly rotating selection of products when you shop at national grocery stores, discount stores and drugstores.
  • Wikibuy: Wikibuy helps to streamline the comparison shopping process. If you sign up for the app, it browses other retailers for you while you’re shopping at a different online store. If it finds the item for a lower price at a different retailer, it will let you know.
  • Honey: Honey is similar to Wikibuy. It’s a browser extension that comparison shops for you, so you can get the lowest price on the items you buy.

Along with using apps to help you save money, you might want to use a money tracking app, such as Mint, to monitor your holiday spending and keep yourself on budget.

7. Send E-Cards

From the purchase price of the cards themselves to the cost of postage, sending holiday cards to your loved ones can get pricey quickly. A more budget-friendly option is to send e-cards to your family and friends. Some e-cards are available for free while others charge a small fee based on the card’s design.

8. Give Homemade Gifts

Sometimes, the best gift is something you made yourself. Homemade gifts can range from a batch of holiday cookies to a handknitted sweater or scarf. Along with potentially costing less than anything you’d buy in a store, a homemade gift often has greater sentimental value. The person you give it to will know you were thinking about them and took time out of your day to make them something with love.

 

Get More Money-Saving Advice From Mid Penn Bank

The holidays aren’t the only time of year to be money conscious. Mid Penn Bank has plenty of money-saving resources to help you take control of your budget, set financial goals and plan for your future, all year round. Visit our financial resources page today to learn more. If you’re interested in opening a savings or checking account to help you prepare for the holidays, contact us today.