Every year, it feels like holiday advertising starts earlier and earlier. Many people begin shopping in October which can cause them to lose track of the money and gifts they already purchased. And then in January, families find themselves with a mountain of credit card debt and clutter.
Did you know that 46% of Americans are still paying off debt from the last holiday season, according to WalletHub. What if you did something different this year? What if you created a manageable budget, reduced spending, and simplified gift-giving? Here are three simple steps to save money and reduce spending over the holidays.
Write Down Your Budget
Open a spreadsheet on your computer or grab a notebook and write down your budget. This seems like a simple step but it’s an important one. It allows you to see all the expenses together and understand the magnitude of your purchases before they happen. Every year, I copy the spreadsheet of last year’s budget as my starting point. And I ask myself questions like, what worked last year? Where did we over or under estimate our expenses? Are there any plans this year that will affect our budget? Should I adjust our gift list and remove or add people? Your budget should include not just gifts but activities and travel like hosting a holiday party, buying new clothing for a holiday function, and travel expenses.
Use Existing Inventory
Take time early in the season to assess what you already own including wrapping paper, decorations, holiday attire, baking supplies, and travel items. Go through these categories one by one to understand what you already own and may have forgotten about. Do this before you start buying for the holidays.
Resolve to use all your wrapping paper and bows before you buy more. Donate lesser used decorations so everything fits easily in the storage room in January. Try on your holiday wardrobe to see what items will work for the invitations you’ve received. Consider borrowing a dress or ugly sweater to save money on items you only wear once. Double check your baking supplies and watch for sales on products you use in larger quantities. Set aside travel toiletries for each family member and make a list of the items you need to purchase before your trip. Using your existing inventory is one of the easiest ways to get organized. But first, you have to figure out what you already own.
Share Your Intentions with Family
Simplifying the holidays is a topic on many people’s minds right now. 64% of people believe that too many gifts are given at the holidays. And the question I hear all the time is, how do I talk to my family about simplifying gift giving. I encourage you to share these intentions with your family. Have a conversation about how you’d like to simplify gift giving and still enjoy time together. Offer budget friendly suggestions of experiences you can share such as cookie baking, a movie, or a family game night.
If you’re feeling financial stress and overwhelmed by the holidays, take time today to write down your budget. Look at what items you already own so you don’t overbuy. And share your intentions for celebrating a simpler holiday filled with just the right amount of gifts that won’t break the bank.