December 7, 2020

How to Avoid Overspending This Holiday Season

It’s extremely easy to overspend, especially this time of year. Following some simple budget guidelines can keep you from paying off holiday debt in the new year. With all the hustle and bustle it’s easy to lose track of how much money you are spending. If you have a habit of overindulging on yourself and others during the holidays, that doesn’t mean you can’t remain on budget while still enjoying a nice holiday season with your loved ones.

Set a Holiday Spending Limit

If you really want to avoid overspending this holiday season, figure out a holiday spending limit and stick to it. This is one of the best budget methods when it comes to staying on track. Examine your bank accounts and figure out how much money you can realistically afford to spend without having to rely on credit cards or draining your savings account. When setting a holiday spending limit, don’t forget to leave some room in the budget for the extras, such as holiday meals, travel expenses, restaurants, holiday décor, gift wrapping supplies, etc., as those miscellaneous expenses have a way of sneaking up on us.

Track Your Spending

The next step after setting a holiday budget is to track your spending by writing down every dollar you spend and note what you paid for. It’s not useful to make a budget if you don’t have any intention of sticking to it, and you’re only going to know where you stand if you keep track. One way to achieve this goal is to set the money you plan on spending for the holidays in a separate bank account. If it’s cash, keep it inside of an envelope and separate from your other spending cash. If you don’t have a separate account, consider purchasing a gift card to make all of your holiday related purchases with. Another option is to track your spending with a spreadsheet or by using an app or list on your smartphone.

Avoid the Temptations

If you tend to get sucked into the holiday ads and special sales events and end up buying things you don’t need or weren’t planning on purchasing, then avoiding those temptations is a must. It’s important to keep in mind that not every deal is a bargain. It’s not uncommon for retailers to inflate the prices to make it seem like you’re getting a deep discount during these special holiday sales, when in reality, there are better deals during other times of the year. If overspending during these holiday sales events is difficult to avoid, then it might be time to find a new holiday tradition and just skip the sales altogether.

Find Alternative Ways to Celebrate

Many of us get so caught up in the shopping process, that we forget there’s more to the holidays than buying presents. Instead of exchanging gifts, consider creating other holiday memories and new traditions this holiday season. Set up a cookie exchange, plan a holiday potluck where everyone contributes a dish, or make homemade gifts that come from the heart but don’t require much money to make.

Don’t Forget to Enjoy the Season!

While the holiday season often sneaks up on us, it’s also over before we know it. Instead of going into debt, take some time out this holiday season to enjoy the simple things, such as watching your favorite holiday movies, drinking hot cocoa by the fireplace, or driving around to look at festive lights.

Regardless of what your budget methods are for staying on track this holiday season, the most important thing you can do is create a plan and stick to it. For more tips on smart money matters, contact Safe Money Partners.

photo of Jeff Mohlman

By Jeff Mohlman

Jeffrey has developed a comprehensive network of financial planning and estate planning experts who work for their client’s short-term and long-term goals. Today, the approach he incorporates for his clients follows three basic tenets: 1) being debt-free, 2) maximizing after-tax retirement income, and 3) protecting their estate from unforeseen risks.