Budgeting for the Holidays: Spending Tips and Tricks

Budgeting for the Holidays

There are many holidays celebrated near the end of the year throughout the world, in the U.S, and likely even just within your neighborhood. From Christmas, to Hanukkah, to Kwanzaa and more. Practices differ from holiday to holiday of course, but one very popular tradition during the holidays is gift giving.

Giving gifts means holiday shopping. And a lot of it.

The holidays can be a very stressful time. How will I be able to afford all of these gifts? What will they think if I don’t buy something for them?

This is not how the holidays, a time of joy and togetherness, should be. That’s why Teen Finance Tips is here to help you think about how to budget for the holidays, provide some helpful holiday shopping tips, and share some surprising holiday shopping stats.

Planning Your Smart Holiday Shopping Budget

Holiday spending is no different from much of our other spending advice. The key is to get organized, plan ahead, and be able to recover from “unexpected surprises”.

Step 1 – Brainstorm

Sometimes the easiest way is to just start writing it all down. Create a spreadsheet, get a piece of paper, a whiteboard, or whatever you prefer, and start with a list of everyone you plan to shop for. Then start filling in the blanks with gift ideas. Don’t worry so much about pricing at this point, the most important part is getting a general idea of what you want to buy and how much.

Step 2 – Price Shop

Now it’s time to add in prices. Take a look at some local stores, store websites online, Amazon, or wherever else you could shop and mark down how much you’d have to spend for each gift. Don’t freak out if your total is absolutely out of your price range. It’s normal.

Step 3 – Set Your Spending Schedule

Hopefully you already have a good idea of how much you make, how to manage your spending habits, and where your money is going after each paycheck. You’ll need to figure out how much time you have until you plan to give these gifts and how much you can afford to comfortably spend each check. Be sure not to spread yourself too thin, and avoid dipping into your savings or preventing yourself from saving during this time.

Step 4 – Compare Your Holiday Budget with Gift List

How does your budget stack up against the total you want to purchase? If you don’t quite have enough don’t worry. Even if you do have enough you should still take a look at the next step to see how much you could save.

Step 5 – Look for Gift Alternatives and Deals

Look for coupons, lower prices from different sellers, or opportunities to make some of your gifts rather than buy them. This can help you save some money and potentially put you within your spending range. If it doesn’t, you’ll have to take a look at how you can reduce your list so you’re not overspending.

Holiday Spending Statistics

Brace yourself… these holiday consumer stats may shock you. According to the National Retail Federation, young adults will be spending even more this holiday season. Here are some holiday spending statistics that they found:

  • $1,007 is the average spending per consumer during the holiday season
  • 77% of consumers say they will spend more this year than they did last year
  • Only 6% of surveyed individuals say that they don’t holiday shop
  • Spending on gift cards alone is expected to account for 59% of spending, amounting to a whopping $29.9 billion
  • 42% of holiday purchases are made by credit card (Yikes! Even if you have a high credit limit, be careful not to damage your credit by overspending)

Holiday Spending Tips

Don’t ruin the holidays for yourself by spending beyond your budget and putting yourself in a bad spot financially. That’s no way to start the new year! Keep in mind these helpful holiday spending tips to help your holidays be stress-free:

  1. Plan ahead and make a budget – you won’t have to panic or choose between the last few people on your list if you map out your purchases in advance.
  2. Buy throughout the year and keep a bin – who says you have to shop for the holidays right before the holidays? Spread out the spending and make it more manageable.
  3. Reduce your list – no matter what your head is telling you or how much you may want to, you’re not obligated to buy presents for the whole world.
  4. Coupons and dealssave money by couponing, taking advantage of Black Friday, Cyber Monday, and other holiday savings events.
  5. DIY holiday gifts – homemade gifts are way better than anything you could buy. Spend more thought and time, not more money!
  6. Experiences are greater than objects – consider planning events for a whole group rather than buying individual gifts. This works particularly well for families or close friend groups.