The average person spends around $900 on gifts for the holiday season, according to American Research Group. That amount doesn’t even account for other holiday spending, such as travel costs, food, get togethers, decorations, and more.
Some people even go into credit card debt to spend for the holidays, but is that really worth it?
I’m going to guess not.
Putting your holiday spending on a credit card is a major problem because you will eventually have to pay off that debt.
Plus, interest and other finance charges may be added, meaning that small amount you put on your credit card will grow into a much bigger number. This can then impact your credit score, your credit history, your debt to income ratio, and more.
Going into debt for gifts and holiday events just adds stress, and it takes away from the true meaning of the holiday season.
The holidays can be quite expensive, but they don’t have to be if you are mindful of how you spend and save for the holidays.
Below are my tips on how to increase your holiday savings and not go into debt.
Set a budget.
Before you make a list of all the things you want to buy for the holidays, you should set a realistic holiday budget. This will help you analyze your holiday spending so that you can spend less money and not go into any holiday debt.
I recommend seeing how much money you already have set aside for the holidays, analyze how much you think you will spend, and figure out what you need to do so that you don’t go over your spending budget.
Items you’ll want to think about and possibly include in your holiday budget are:
- Transportation costs
- Food for parties and get togethers
- Holiday cards
- Wrapping supplies
Use cash when shopping.
Using only cash when shopping can prevent impulse purchases.
A cash budget works because you only have so much money to work with. If you spend all of your cash, then you won’t be able to purchase anything else.
This can help you separate your “wants” from your “needs” when shopping.
When doing your holiday shopping with cash, you will have to carefully plan out each purchase, each time you go to the store, and so on.
Related articles: 10 Simple Ways to Keep Your Monthly Grocery Budget At $125 Per Person
Give just one gift.
If you’re running low on time or money, you may just want to give one gift to each person. I know some people who are giving numerous gifts around the holidays, and while they may be able to afford it, I’m sure there are some who cannot.
Remember, the holidays are not about the gifts. Instead, focus on what you truly can afford, even if that means you can only give one present. It’s the thought that counts, not the gift or the amount of gifts that you give!
Get cash back on your shopping.
Sign up for a website like Ebates where you can earn CASH BACK for spending how you normally would online. The service is free too!
Also, use credit cards with cash back bonuses or airline miles to help offset the cost of your holiday spending.
Find ways to cut back right now.
There are lots of little things you can do that may help you to save money now and well into the future. Even if you can only find $100 extra dollars to spend, that’s still $100 more than what you had before.
- Get rid of your cable.
- Find a more affordable cell phone plan.
- Eat out less. Eat out just one or two times less this month and then you’ll have more holiday spending money!
- Negotiate your car and home insurance bills.
- Cancel your gym membership.
Secret Santa is your friend.
If part of your holiday celebration is gift giving with all of your family and friends, you may want to think about doing a gift exchange where each person only gives one meaningful gift to just one person. This can save a lot of money, as well as a lot of time. Plus, you’ll be able to put more thought into a gift as you’ll just be giving one.
Find ways to make additional holiday spending cash.
If you can’t find ways to cut back, then you may want to find ways to make more money. This can make the holiday season a little more enjoyable as you won’t have to go into debt or use your savings in order to purchase holiday gifts.
Plus, there are tons of things you could do to make extra money. If you’re looking for a part-time job, there are plenty of places that are looking for holiday help, such as UPS, Kohls, Macy’s, Christmas tree lots, restaurants, and more.
Related article: How To Make a $100 a Day | 25+ Ways to Make Money Fast
Shop for the holidays as soon as you can.
Starting your holiday shopping now is better than waiting until the last day- or even the day of!
There are many savvy shoppers who start up to a full year before the holiday they are celebrating.
You may call them crazy, but I’m sure it saves them a lot of stress and money.
The earlier you start shopping, the more money you are likely to save. This is because you won’t be in a rush to find what you are hoping to buy, and you will be able to shop the sales as they come. When someone is low on time, they are more likely to buy items they may not need at a price that is higher than usual.
Start saving early.
While this tip won’t necessarily work for this holiday season, you can start saving and preparing for 2021.
By saving a little bit of money each day, each week, or even each month right now, you’ll make the sting of holiday season spending a little less painful, as you’ll already have saved and budgeted for it!
Try saving just $20 a week. By end of one year you will easily have saved $1,040 without even noticing! I recommend doing this on auto pilot. Contact your payroll provider at work and have them automatically deposit a portion of your paycheck into a separate account outside of your main bank.
Lastly, remember the true meaning of the holidays.
No matter what holiday you celebrate, remember the real reason for celebrating.
You don’t need to spend a lot of money to be happy, instead think about spending more quality time with your loved ones.
How much money will you spend this holiday season? How do you plan on increasing your holiday savings?