The holiday season is upon us once again. There are countless joys that come along with this time of year. But there’s also a major obligation – gift giving.
It’s difficult to balance between spending enough to satiate everyone’s wants without impacting your personal budget. No matter how much you want to please your friends and family with great gifts, don’t let this get in the way of your financial health. Here are six tips for frugal holiday spending that will keep you from going overboard.
Don’t Buy Things Just Because “They’re a Good Deal”
We’ve all seen the signs advertising outrageous deals. These are especially prevalent on blowout shopping days such as Black Friday and Cyber Monday. Outrageous savings is what enticed consumers to spend $1 million per minute at the peak of Black Friday last year.
But how much of that money was spend the right way? Shark Tank’s Kevin O’Leary explained it perfectly to CNBC, “If you’re spending money on something you wouldn’t have bought otherwise just because it has a ’50 [percent] off sticker on it, you’re still throwing away your hard-earned dollars.” You’re only getting a good deal when you buy something you actually want or need. Don’t get sucked into making extraneous purchases just because of sale prices.
Spend Less While You’re Out Shopping
Shopping during the holiday season can be exhausting. This is especially true if you’re doing it out at the malls as opposed to online. Being in congested stores around frantic shoppers and waiting in line all day can take a toll on you. It’s tempting to make extra purchases, such as lunch, or a latte, in order to keep yourself going. But these will add up if you’re spending a lot of time shopping. CEO of Freedom Debt Relief, Andrew Housser, suggests cutting back on the type of expenses if you can’t cut them out altogether.
For example, get a drip coffee instead of a fancy blended drink. Try to keep incidental purchases to a minimum.
Make a Budget (And Stick to It)
This might sound like an obvious suggestion, but not nearly enough people consider the practicality of creating a strict budget specifically for holiday shopping. It’s extremely easy to let things spiral out of control during this time of year. Keep your receipts and add them up as you make every purchase. It’ll be helpful to factor in larger purchase before you buy anything.
Re-Gift Things You Got Last Year and Never Used
How often do you receive gifts that end up sitting at the back of your closet? They can come from the office Secret Santa tradition, or even a close relative who ran out of time and had to get something at the last minute. Either way, you should try to do something with those old, unwanted gifts. Try to think if there’s anyone on your holiday list who might actually have a use for them. Otherwise, you can at least donate them to charity.
Use Cash Instead of Cards
It’s so much more convenient to just swipe your credit card than it is to carry around wads of cash. This is especially true during the holiday season, when you’ll need to be keeping track of bag of purchase, children, the time, and a hundred other things. But these factors are also going to make it a lot easier for you to overspend. When you bring a set amount of cash with you to the mall, you’ll know exactly when you’ve reached your spending limit. With a credit card, you might accidentally go way overboard—and regret it later when you need to pay the bill.
Consider Cutting Back on Gift-Giving Between Adults
Some people say not giving gifts to grown family and colleagues makes you a Grinch. Others say that reducing your spending in this department is just common sense. Every year the U.S. spends $10 billion on unwanted gifts! Imagine if those resources were put to something more constructive. Consider making a pact between you and your companions to set limits on how much you buy for each other. Not only will you save money, you’ll lower the chances of creating needless waste.
The holidays cause people to spend money in ways that they would never consider at other times of the year. Try to take a step back and evaluate your financial situation, and what actually makes sense for you on a consumption perspective. Don’t let the emotions of the season put you in a bad place with money.
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