The holidays may be a time of cheer but for many people, it’s also a time for overspending. In fact, almost two-thirds of adults report feeling pressured to spend more than they mean to during this time of the year. Unfortunately, it has also come to a point when this pressure has led to negative impacts on people’s finances and even their mental well-being.
Holiday Spending
According to a post-holiday ‘debt survey’ done by MagnifyMoney, people end up getting themselves $1,000 in debt because of overspending. Meanwhile, the average $1,679 consumer spends on gifts, an increase from the previous years. Even more concerning is that these people spend the first couple of months of the year paying off these debts incurred over the holiday season.
To avoid being part of the demographic above, here are some tips consumers can follow.
Putting A Savings Plan In Place
The best place to start is saving for a holiday budget and putting a plan to do so in place. This can mean skipping on spending on entertainment, reducing dinners out or cutting back on weekend travels. Another important thing is to start as early as possible. Putting away as little as $100 or $200 per month will still go a long way in preparing one’s finances for holiday expenses, according to TIAA financial advisor Shelly-Ann Eweka.
Budget For Holiday Expenses
Next, make a list of gifts and other things one will need to spend money on when they come home or travel for Thanksgiving, Christmas or New Year. Then try and find the best deals and prices around to save as much of one’s holiday fund as possible.
Part of this is knowing the optimal time to book plane tickets depending on which holiday a person is planning on flying. For example, experts say that people who are traveling for Christmas should buy their tickets in the first week of December as prices are down by 13% at this time.
A Better Way to Exchange Gifts
While most people would love to buy their loved ones individual gifts, actually doing so would be too expensive for a single person. A great alternative for going this route is to suggest that one’s family or friend group does a group exchange gift. This would take the pressure off a single person to get something for everybody while still getting to spread the spirit of giving during the season.
Skip Big-Ticket Items
In the same vein, people shouldn’t feel pressured to spring for expensive gifts, too. Instead of buying material gifts, one can show their thoughtfulness through other means such as volunteering to babysit a niece or a nephew and even baking treats for loved ones. Remember that one still has long-term financial goals that need funding once the holidays are over.
