By Mark Foster
While the holidays might not be right around the corner, it’s still a good idea to start thinking about your holiday spending. To some, it might seem odd to start thinking about a holiday budget now, however planning sooner is better than later!
The holiday season rolls around at the same time every year, yet it still seems to catch many off-guard. Ultimately, waiting until the last minute to begin thinking about a budget can lead to overspending during this time of year. A helpful way to lower these stressors is to take a look at your finances now, so you won’t have to worry about how much to spend later.
Those who choose not to use credit cards for holiday shopping may not think advance planning is necessary, however even if you choose not to use your credit, overspending can still occur. It’s easy to take advantage of sales, but this can also lead to many struggling to pay a utility bill, mortgage, or any other expense you may have.
The first rule of holiday spending is to take a look at your budget to see how much disposable income you have after all monthly expenses are paid. Remember, if you can’t afford it don’t buy it! Forcing extra spending into your budget will make your finances suffer. As another option, you can plan to buy throughout the year, and work those purchases into your regular budget. This way, you reduce the risk of having a negative impact in your family budget. A strategy I like to use is to buy gift cards throughout the year, and use them as gifts for the holidays.
A third option to help manage a holiday budget is what I like to call, “Do it yourself layaway!” Many businesses have gotten rid of layaway as an option for consumers, so as an alternative you can create the same plan for yourself by setting money aside each pay period until you have enough for your desired purchase.
For example, I’m currently in the process of replacing an electric guitar, and a replacement costs $210. Rather than spending the entire amount at once, I chose to spread out the purchase by purchasing a gift card each pay period. Within a few months, I’ll have enough to go buy the guitar. This is a great way to save for purchases, curb impulse spending, and avoid overspending.
With just a little bit of advance planning, your holiday shopping will be less stressful on you and your finances.