By Darlette McCormick, AFC, CHC
It may seem like it is still a long way off, but the holiday season for much of the world will be here before we know it. You can do yourself a favor by starting to plan now for end-of-year activities. Here are three steps to take this month to help get started.
Make a holiday budget.
For many of us, it is easy to overextend ourselves during the holidays. Last year, Americans, on average, racked up more than $1,000 in holiday debt. In Britain, 16 percent of shoppers surveyed said they would likely fall behind with their January finances due to holiday over-spending. On November 11, 2018, Singles Day in China became the biggest online shopping spree the world has ever seen, with shoppers spending$45 billion in a 24-hour period.
One of the best ways to avoid overspending during the holidays is to develop a holiday budget. However, before you can develop a holiday spending plan, you first need to have a solid understanding of your current financial situation. If you have never created a monthly budget, start by listing your monthly income and expenses. Knowing how much you can reasonably afford to spend during the holidays helps you set the expectation of how and what to shop for.
For your holiday budget, set a limit on what you plan to spend and then decide how you will save the money. You can also consider ways to earn additional income between now and December. Are you willing to take on a part-time job for the next few months?
Purchase (or better yet, make) gifts sooner rather than later.
As the end of summer approaches, look for seasonal closeout gifts that you can purchase at a great discount. The brother-in-law who is the grill master will love the grilling utensil set that you get for him with his favorite sports team on it. He’ll never know that you got if for 75% off!
To reduce the total amount spent on gifts, consider asking your family to draw names. Make it a tradition at the summer family cookout to draw name for holiday gifts. Start conversations about what everyone wants and you will already have an idea of what to start looking for.
If you happen to be crafty, consider hand-made gifts for family and friends. Start now creating thoughtful, personalized items that your family will treasure much more than a gift purchased from the store. Your sister who is expecting her first child will just love the blanket that you knitted for her over the summer.
If you plan to take advantage of Black Friday and Cyber Monday deals, prepare to set aside an amount of money each month into an account. You could also purchase gift cards each month to capture your holiday savings. Some merchants like Sam’s Club, periodically offer discounts where you can purchase a $50 gift card for $30.
Using credit cards for purchases should be done with the utmost caution, but some cards offer great cash rewards and points that can reduce your out of pocket spending for the holiday. Using these cards not only for normal monthly expenses but also for your summer vacation plans can add up to a very nice savings by November. Just remember to pay off any charges by the end of the billing cycle to avoid paying interest.
Make Your Travel Plans.
For some, holiday travel is a major cost. In most cases, the earlier you purchase tickets, the more money you can save. Skyscanner is a travel fare search engine that gathers information on the best times to purchase flights. According to the data gathered from 2018, to get the best prices, you should book a domestic flight 30 days in advance and an international flight 4 months ahead of time.
Evaluate the cost of traveling by air, versus renting a car or traveling by train or bus. If you are coming home for the holidays from college, can you carpool with a classmate?
If your extended family gathers together to celebrate the holidays, start a conversation now on potential locations. In consideration of travel costs, as well as hosting costs, find out if family members are willing to rotate the location of the annual get-together from year to year?
Taking the time now to map out a holiday plan can help you enjoy a less-stressful holiday season with family and friends, while saving money along the way.
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