This post was written by Heather Burgette, MBA, employee financial educator, Parkview Employee Assistance Program.
It’s hard to believe that the holidays – Halloween, Thanksgiving, Christmas – are upon us already. It’s even more difficult to believe the amount of money spent last year over the holiday season.
- An estimated 172 million Americans spent $8.8 billion on Halloween candy, costumes and decorations in 2019.
- Last year, Thanksgiving celebrations cost Americans an average of $186.05 per person.
- A record 189.6 million Americans went shopping over the five-day Thanksgiving weekend, spending $9.4 billion.
- Last year, holiday retail sales surpassed the trillion-dollar mark (yes, 12 zeros), with U.S. households spending an average of $1,536 during the season.
Little did we know how drastically different our lives would be by March 2020. As I prepare for the holidays, I’m most aware of how very excited my kids are. As a mom of four kids, ages 2-9, I see this season through their eyes. They’re obsessed with their costumes right now and dreaming about bags of candy. Next month it’ll be yummy food and time with family. December will be dreaming of new toys, decorating our home and lots of candy canes.
As adults, we are faced with the grim reality that the holidays will likely be very different this year. We can choose to see this as an opportunity to celebrate the holidays without all of the fluff and commercialism that surrounds it. In a year when we may feel like we’ve had very little choice in our lives, we are empowered now to choose to do the holidays differently. That starts with a plan for how much and where you will spend your hard-earned money.
Planning for the holidays
Keeping a budget during the holiday season will benefit you in many ways. First, you'll avoid overspending, which will keep you from playing "catch up" when the season ends. Second, you'll reduce financial stress throughout the holiday season, which will make the experience more enjoyable for you. Try these holiday spending budget strategies to ease financial tension during this hectic season:
1. Create a budget. Determine how much money is available for you to spend based on your current financial situation. Be realistic with your holiday spending budget, regardless of how much or little you can play with. This is your spending limit and your goal is to stay within it. Remember that your expenses must be less than your income. There's no need to get into extensive debt because of the holidays.
2. Make a list. List everyone that you need to provide a gift for so you can create a realistic plan to accommodate your gift-giving needs. It’s OK this year if you decide to forego gift-giving.
3. Create a budget worksheet. Create a basic budget worksheet on paper or on your computer. List every gift recipient in one column. Create a column to brainstorm ideas, a column for your planned budget for each recipient and a column for how much you actually spent on each person. Track overall budget and actual spending as well to see how you do at the end.
4. Tweak as necessary. Make changes to your budget whenever you overspend on one person so you stay within your budget overall. Try to set realistic budget amounts for each of the recipients on your worksheet in order to minimize the need for edits to your worksheet, but do not be afraid to make edits as necessary.
5. Trim as necessary. Giving gifts to your neighbors, your children's teachers and service providers like the mailman is a nice sentiment, but not necessary. If your budget cannot support your list of recipients, trim the list! Consider giving stocking stuffer type gifts to these recipients if you insist on giving them something for the holidays. Small gifts, inexpensive homemade gifts or simple greeting cards are just as sentimental and memorable but will not break your budget.
6. Start early. When working on a budget, starting early offers a definite advantage. The more time you have to get your shopping done, the more time you have to comparison shop, shop sales and look for deals. Avoid leaving your shopping until the last moment; otherwise you'll likely pay higher prices and spend more time feeling aggravated.
It only takes a few simple changes in your spending and budgeting habits to improve your holiday shopping experience. By starting early and following a plan, you can overcome the obstacles of holiday shopping, budgeting, and spending with ease.
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