After the nontraditional 2020 holiday season, many of us are determined to return to our normal celebrations in 2021. And for most people, that means spending a lot of money.
U.S. households are predicted to spend an average of $1,463 on holiday shopping in 2021, a 5 percent increase from last year, according to research from Deloitte. Many will spend even more.
It’s easy to blow your budget during the holidays, especially as we all aim to move beyond the pandemic and enjoy all the season has to offer. Everyone wants to buy gifts, dine out, and entertain friends and family—and the costs can add up, leaving you with extra financial stress in the new year.
You can have a happy holiday season without facing difficult financial consequences in January. It just takes some planning and discipline. Consider these five tips to create a happy holiday without starting the new year off on a bad financial note.
How to Avoid Holiday Overspending
Create a holiday budget
Sit down and figure out how much you can reasonably afford to spend on the holidays. Then determine how you will divvy up that amount among the gifts you want to buy and activities you want to enjoy. Write it all down and commit to sticking to it.2Make a gift list
In addition to planning how much you’ll spend on each person, it’s a good idea to go ahead and decide on the gifts you plan to buy. When possible, purchase online to avoid being swayed to buy items that aren’t on your list. When purchasing online, you may be able to use credit card reward points or cash-back sites like Rakuten to get discounts or cash back on your gift purchases.
If you start your planning and shopping early—before Black Friday, for instance—you’ll have a better chance of finding the items you want and taking advantage of sales, discounts, and coupons. When you wait until the last minute, you’re more likely to pay top dollar to get the last available gadget or pay extra shipping costs to make sure it arrives on time.
Think beyond regular, store-bought gifts. Some of the most memorable and appreciated gifts are the ones you create yourself. Give jars of your famous homemade salsa, coupons for yard work or housecleaning, handmade picture frames, or other items that show off your creativity. You’ll save money and the recipient will feel loved.
Host the gatherings
For many of us, one of the best parts of the holiday season is spending time with folks we rarely see throughout the year. But grabbing dinner or drinks with every old friend who’s in town for the season can get pricey. You can save money and still enjoy the tradition by inviting friends and family to eat or drink at your place rather than celebrating at a pricey restaurant. Make it a potluck or split the costs of ordering takeout to keep the costs down.
Keep an eye on your credit
As you’re shopping and spending more than normal throughout the holiday season, take time to keep track of your credit scores. Most people use credit cards more than usual during November and December, and it’s wise to keep track of how that usage may be affecting your credit.
By planning ahead and staying alert throughout the holiday spending season, you can avoid overspending and start the new year without financial regrets.
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