The holiday season is splendid! It is a time to celebrate with family and friends and participate in joyous events. But 2020 has disrupted all of our lives. The COVID-19 pandemic has caused financial problems and health scares. While we can’t shake off the year just yet, that shouldn’t stop us from celebrating. That said, what can you do to ensure you won’t break the bank this holiday? Check out some ideas below.
Discuss Holiday Plans
This year especially, many have experienced financial insecurities. One approach is to have discussions with your close friends and family to share holiday plans and ways the family can support each other during these difficult times.
Don’t be afraid to sit down with your children and discuss that things are different this year. Children understand that 2020 is unique. Engage them as a member of the family to work on holiday plans. This provides them an opportunity to feel part of the process and gives you the ability to help set expectations.
Look for opportunities to celebrate the holidays that don’t involve buying gifts. Host a virtual event to bake holiday cookies together. Talk to everyone about limiting gifts this year. This also goes for your holiday parties and dinners. If you plan on hosting, consider a potluck dinner. Don’t be afraid to ask others to contribute.
Create a Holiday Budget
Most people shy away from setting budgets. I know. It seems constricting and the need for a lot of math! But don’t despair. It’s easier than you think. Start by identifying how much you can spend for the holidays. Determine how much you have to spend by going through your earning statements, bank statements, and other banking information. Set a spending limit so you know exactly what your available cash and savings are. This way, you won’t have to worry about potential debt.
Write down a list to decide what you want to buy, and use your holiday budget to see if you can afford it. Creating a spreadsheet or using a budgeting app will help you with the math. Split the list into categories such as gifts, charity, decorations, foods, cards, and other potential holiday expenses.
Prioritize your spending by numbering each item so you know what you should buy first and what you can buy later. Next, give yourself a spending limit per item. You have to balance your spending with your available money. Playing around with the spreadsheet and adjusting the numbers will help you reach a comfortable budget. Do not forget to keep track of what you actually spend for each category and line item.
Start a New Tradition
This is a new year – a situation that none of us have faced before. Take advantage of the change and look to do things differently going forward. Maybe start a tradition to set aside a percentage of your holiday budget to donate as a family to a local charity. This gives the family the opportunity to talk about important community values, sharing those values with the children and getting them involved with the conversation. And it is always a wonderful feeling when giving to others. Bonus – all money donated to approved charities is tax deductible!
Some families set aside a certain amount of their holiday budget to spend together as a family after the holidays to take advantage of holiday sales. Again, this gives everyone a chance to engage on your personal family values and decide together on some items to be purchased for the family.
Remember There Will Always Be Another
Impulse buying is the killer of budgeting and financial stability. And it is so easy to fall into that trap! When you see something that is shiny and new, remind yourself you will always be able to find another thing you find tempting. Is it part of your holiday budget? No? Then drag yourself away.
Do Your Research and Buy Early
Before you buy, browse the web and look at other retail stores to do a price comparison. Read reviews before purchasing product. Consider purchasing items of higher quality. Cheap products can break easily and just waste your money.
If you order holiday purchases online, don’t wait until the last minute. Otherwise, you will have to pay ridiculously high shipping fees in order to get the items on time. To avoid this situation, start your online shopping early.
If you go into a brick and mortar store, make sure you walk into the store with a specific list, including how much you are willing to spend for each item and stick to it. This will help so that you don’t run into the temptation to impulse spend or overspend trying to get the perfect gift.
Finding ways to make it through the holiday season is important now more than ever. With careful planning, smart budgeting, and open communication, you might find yourself stressing less and enjoying the holidays more.
Mary Sprague, NAAV Volunteer Financial Advisor for Financial Literacy