Budgeting & Savings

How To Be Frugal During The Holidays

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As the holiday season approaches, people are starting to draft their budget plans for the upcoming festivities. This year the average holiday shopper is expected to spend close to $800 or more for gifts. About half of those people will also spend an average of $150 on items for themselves. If your goal is to have fun but also save some money in the process, there are several ways to remain frugal during the holiday season.

Many people spend hundreds or even thousands of dollars during the holidays. A considerable amount of this money may be allocated for gifts for family members and friends, but travel expenses, holiday décor, entertaining, food expenses, and more also can cost a small fortune. It’s possible to get through the holidays without breaking your budget or going into debt. It takes a little bit of effort and some planning, but by January 1st, it will be worth all the hard work.

If you struggle financially during the rest of the year, you can understandably expect to feel intense financial stress because of these additional expenses throughout the holiday season, as well. Adjusting how you manage and spend money during the holidays may decrease related stress in the weeks ahead.

Here are some tips to help you avoid the holiday financial headache:

Create a budget and spending plan –

Before you begin spending any money on presents, travel, party planning, and more, create a spending plan that covers income and expenses for the next few months. A smart way to approach this is to determine which expenses you will pay for out of each paycheck that you receive for the next few months. Because expenses can run high during this time of year, this spending plan may replace the typical monthly budget that you live by. If you live on a tight budget, it is in your best interest to take this step several months ahead of time.

Remember to update your plan regularly so that you always know where you stand financially. By preparing and reviewing a spending plan upfront, you may be able to determine if you need to find a part-time seasonal job to cover some of your extra expenses. Here’s a free budgeting tool that will help you create your spending plan: www.onlinebudgetadvisor.com

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Stick to your shopping list –

As part of your spending plan, decide which gifts you want to purchase for each person on your list. Creating a shopping list may help you to avoid overspending at stores. This step will help you to more easily stay on track with your spending plan while still buying thoughtful, quality gifts for those on your list. Consider window shopping online while you create a shopping list so that you can more accurately determine how much your gift ideas cost.

If you are an impulsive shopper, it may be helpful to make all of your purchases online. By shopping online, you may have presents for out-of-town recipients shipped directly to them, and this may help you to save money.

Look for sales and promotions –  

Many items that you have decided to purchase may go on sale in the weeks ahead. You may need to purchase some items well ahead of time, such as if you need to ship them to recipients overseas. However, even with timing concerns in mind, you may find multiple sales and promotions on most items on your list. If your spending plan has been created with full-cost prices, you may be able to save a substantial amount of money compared to your original estimate. Keep in mind that sales and promotions also extend to travel plans, party décor, food, and more.

Avoid any more debt – 

If you are in the habit of living on a tight budget and using credit cards to pay for unexpected expenses, you may want to adjust this behavior before the holidays. One leading way to avoid debt during the holidays is to have enough money in your savings account to cover all planned expenses. It is also wise to fund an emergency savings account before this expensive season arrives. After all, it is easy to overspend at this time of the year, and an emergency savings account provides you with access to additional cash to spend as needed. Keep in mind that credit card purchases may be convenient now, but they can result in substantial hardship in the months and years ahead as you try to pay the balance off.

Downsize holiday plans if necessary –  

As you walk through these steps, you may realize that you simply cannot afford to spend money as desired throughout the weeks ahead. The best time to make this realization is well before you begin spending money on presents, travel, and other expenses. When you understand what your budget is for these items upfront and how much cash you have available to spend on them through savings and other financial resources, you can determine what aspects of your plans need to be downsized. For example, you may decide to skip holiday travel plans so that you can avoid credit card debt. Perhaps you will only host a few friends for a small holiday party rather than a lavish affair with dozens of invited guests.

Determine the amount of money to be spent –

Many people begin the holiday season with a list of people they want to give gifts to, and then figure out what they want to purchase. They forget to add the cost of Christmas extras such as Christmas cards, postage, decorations, special food, and more. The amount of money spent can easily get out of control.

Purchase items using cash –

You might get tempted to use your credit cards for holiday shopping so that you can take advantage of the points. If you decide to follow this plan, ensure that you can pay everything off at the end of the month. If you get hit with that credit card interest, your gifts could cost up to 20 percent more than what you paid at the register. It will take discipline, but refuse to use credit cards when preparing for the holidays. Experts recommend that once the budget amount has been determined, take out the same amount in cash. When the cash is gone, the budget amount has been reached. It will take discipline to not spend anymore but could save you a lot of money.

Save on postage and send e-cards –

There are a wide variety of websites that offer the opportunity to send free holiday e-cards. If a person is willing to spend a small amount of money, they can send some that are pretty impressive. Some play music, others provide games to play, and more. Some e-card websites even allow people to create an individualized card with a picture.

Don’t lose purchasing control –

Christmas is not the time of year parents want to see the look of disappointment on their children’s faces. If a child wants a present that is over budget, it may be wise to provide them with alternate choices. This will give the child a chance to choose what they really want, and discover there are limits. Also, check out the “4-gift rule” that many parents are implementing this year to stay on budget!

Permit sufficient time to get ready –

Last minute gift buying can be costly. Creating a workable plan for purchasing, decorating, cooking, etc. can save a ton of money, and reduce stress.

Pantry search party –

You will probably cook quite a few holiday meals during this time of year. To avoid overspending at the grocery store, check your pantry and cupboards to ensure that you don’t buy extras of items you already have. Bonus tip: see if you can tweak different recipes to use items already in your cupboard.

Cook what costs less –

Every time you go to a dinner party, there is always that one dish that everyone ignores. Avoid this fate at your gathering by making dishes that you know you and your friends will love. Not only will you become a hit at the next dinner party, but you won’t waste food and money.

Make it a potluck party –

During the holidays, you’ll go to a lot of potlucks. This makes sense as many of us holding parties don’t want to spend an entire day over a hot stove. As long as you have friends, good wine, and good times, a potluck holiday dinner party can work for the vast majority of people.

Purchase small frozen turkeys –

Frozen turkeys act as a cheaper option than the fresh version. When you purchase two eight-pound birds, you can buy them cheaper than you would if you bought one 16-pound turkey. Just know that one 16-pound turkey takes about four days to thaw fully.

Use leftovers during the week –

You can make plenty of things from the leftovers in your fridge. When your kids don’t finish their food, wrap it up and save it for later. You can also make broth or soup out of the uneaten turkey.

Never go shopping without a list –

This tip will also serve you well in the 11 other months of the year. When you shop for Thanksgiving groceries or Christmas gifts, always make a list beforehand so that you don’t make unnecessary purchases that take you over your spending limit. You won’t think the holidays are so jolly if you go into the New Year in massive debt.

Don’t forget the true meaning –

Buying presents and other things is a part of the holiday season. It should not be the only part of the season that gets recognized. A meaningful personal gift that you make yourself could be worth more to that person than any expensive brand name item. Being with friends and family should be the highlight of this holiday season!

Shop early to get the best deals –

Saving up money for gifts to be purchased as the holiday nears is often a less efficient way of getting things done. Instead, shop for your family and friends one gift at a time months in advance. This makes the typically arduous process of shopping for gifts less stressful since you don’t have to fall in long cashier lines nor fight with fellow shoppers for those last pair of shoes or pants. Shopping early lets you take advantage of discounts and seasonal pricing trends.

Choose your method of payment wisely –

Of course, cash is still the best way to purchase goods and services. Nowadays, however, the reality is that most people use plastic, especially when signing off on big purchases. If you plan on charging your holiday expenses on your credit card, make sure you choose the right card that charges the lowest interest rate. If you’ve maxed out your credit card limits, settle it now before the holiday season arrives.

Plan the feast ahead of time –

Most holiday expenses revolve around food. After all, what better way to celebrate an important date than to eat a great deal of good food with good company? There are many ways to prepare a delicious feast without burning through your entire life savings or emergency fund. For example, for the dining table decor, source the materials from the cloth store’s bargain section or pick out an on-sale cloth piece with a unique design.

Ditch the disposables –

Disposable cups, plates, and utensils are usually the go-to supplies for people who don’t want to spend the entire night washing and drying the dishes after the party. It’s also thought of as a relatively cheaper way to host an event with dozens of guests. From a long-term utility perspective, however, real plates and utensils are cheaper since you don’t need to replenish them every time there’s an event. You can use them for years, especially if you only use the plates for special occasions. Those disposable items can really add up too!

Decorate with things you already have –

You don’t need to buy expensive flower arrangements or branded lights to decorate your household inside and out. Be creative and resourceful by decorating with organic items in your backyard or art supplies you have on hand. For example, to get a good lighting ambiance without spending too much on rustic candle holders, use colorful glasses that you already have and wildly patterned teacups. It will look super quaint and save you money.

More Holiday Money-Saving Tips:

  1. Don’t send out printed Holiday cards this year. Try using email to send a picture of the kids or just post a picture on Facebook wishing everyone a happy holiday. Most people use the Internet and are just as happy to look at the card online. Printing out cards and buying stamps and envelopes can be really costly. Use an online service such as Paperless Post to send them this year.
  2. Consider making your own wrapping paper instead of buying it. Brown paper bags with big red bows are a great idea. The newspaper also makes nice paper to wrap the gifts in. A page from a magazine will work well for a small gift. Let the kids color on butcher paper or construction paper and then use it to cover the holiday gifts.
  3. Decorate your house with things from nature. Pine cones with glitter will sparkle on the tree or in a bowl on the dining table. Cut out paper snowflakes and hang them throughout the house. Dry, long, and curving branches can also make for a nice decorative sculpture.
  4. Go out and sing Christmas carols with the kids to some of the nearby homes. It doesn’t cost a thing and the neighbors and the kids will love it. It gets everyone into the Holiday spirit.
  5. Draw names out of a hat with the extended family to do a “Secret Santa” type of gift exchange instead of buying a gift for everyone. Set a price point that everyone can afford.
  6. Focus on free or inexpensive family activities. Have a board game night with popcorn and other inexpensive treats. Sit back, relax, and watch some classic holiday movies together!
  7. Go to the local thrift shop or Goodwill and be ready to find some great Christmas decorations. There are all kinds of treasures just waiting to be found.
  8. Make gifts for the family and ask them to do the same. It can be fun to be creative and it will be surprising to see all the amazing gifts that can be made with a little ingenuity.
  9. Black Friday is a good time to get some bargains, as well as Cyber Monday by shopping online. Study the ads and make a plan. It is a great way to get some awesome discounts.
  10. Use cash for the gifts. Put money in envelopes. Each person on the gift list will have a designated amount.
  11. Remember the reason for the season. It is not about money, it is about love and spending time with family and friends. Many people find they have amazing holidays when they stick to the budget.

Conclusion –

It is easy to go overboard throughout the holiday season. After all, you may want to be generous with your selection of presents, visit family in another state who you have not seen recently, and much more. However, when you spend money impulsively rather than strategically, you may suffer from financial stress for months to come.

The holiday season shouldn’t be a time to worry about staying financially afloat. It should be a time of happiness and celebration with the people you love and care about. Then again, several dollars in holiday savings won’t hurt your life after the holiday parties and season dial down. Try to make the most of the holiday season, but don’t go into debt because of it.

Regardless of how much spending you have already done, consider implementing these tips to manage your holiday spending going forward. Give Advantage CCS a call at 1-866-699-2227 or visit us online at https://www.advantageccs.org for free budgeting help and advice!

Author: Lauralynn Mangis
Lauralynn is the Online Marketing Specialist for AdvantageCCS. She is married and has two young daughters. She enjoys writing, reading, hiking, cooking, video games, sewing, and gardening. Lauralynn has a degree in Multimedia Technologies from Pittsburgh Technical College.