Look into the near future.
It’s early January, and you’re motivated to tackle your New Year’s resolutions. Paying off debts is an annual to-do, and there’s a good chance there will be a few other money-related resolutions on your list too, like save for a big goal.
Back to the present.
The holidays are fast approaching, and internal and external pressures to spend money are quickly piling on. Between presents, parties, decorations, and donations, it’s easy to get overwhelmed and spend, spend, spend without thought—especially when you’re spending money on others.
Almost three-quarters of Americans said they failed to properly budget for the holidays last year, according to a survey of 1,000 people conducted by Propeller Insights for Varo Money.
With the following tips, you can be in the quarter of people who are properly budgeting for the holiday season.
Controlling your overall expenses doesn’t mean you have to constrain yourself all the time. Try to identify what’s at the top of your priority list this year, and then figure out what you have to spend on those things (without going into debt).
For some people, being able to spend the majority of their disposable income on what’s most important—getting a relative an extra nice present, making a large donation to charity—is the best part of budgeting. The trick is understanding what you need to trade off to make it work. For example, you have to cut back spending in areas that are less important to you or find ways to make extra money to cover the difference.
Finding a balance is important all year round, not just during the holidays. But others’ expectations and our expectations for ourselves can make managing money particularly tricky during the holidays.
Many holiday expenses, such as traveling to visit relatives or buying at least a few small presents, are more-or-less inevitable. You might have to bear some of these costs even if they’re not a top priority, and should try to include them in your spending plan:
Even if gifts aren’t at the top of your list of priorities, you’ll likely need to buy some presents for family members, friends, and colleagues. Here are some tips for saving money on those inevitable expenses:
Another savings tip—if you have money left in your budget after the holidays, stack up on decorations and other essentials while they’re on sale to avoid having to buy them next year.
We can get bombarded with conflicting messages during the holiday season as commercialization faces off against “it’s the thought that counts.” It’s hard to focus on the later, particularly when others are expected you to follow through with the former.
Fortunately, something doesn’t have to cost a lot to be a wonderful gift. You can prioritize where and when you spend your money and share your intentions with others to help spread a holiday cheer.
Louis DeNicola is a freelance personal finance writer and credit enthusiast. You can find him on Twitter @is_lou.