Holiday Spending – Smart Budgeting Tips

Holiday spendingThe 2016 holiday season is over, and while final results won’t be published for another month or so, initial data indicates that US holiday sales are expected to exceed $1 trillion. This is an increase of approximately 4% over 2015 holiday sales. Did you stick to your holiday budget this year?  See how your spending stacked up to others, and learn some smart holiday budgeting tips for next year along the way. Remember, smart money management pays off with peace of mind now and cash for the future.
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Compare Your Spending To Others

One way to manage your money is to compare yourself to others as far as spending goes. For example, according to Forbes, millennials were predicted to spend an average of $1,427 during the 2016 holiday season. This represents a $355 increase compared to 2015.
Meanwhile, parents planned to spend an average of $1,700 during the holidays. The 2015 average spend for parents of young children was lower at $1,383. Other statistics indicated that parental holiday spending per child was around $495. Gifts for oneself? Men planned to spend around $400 and women $242 on treating themselves. More than half of holiday shoppers had already started making purchases in November, and holiday spending in general was up in 2016 compared to prior year.
How did your spending compare? If you spent less than the average by the year’s end, then you likely budgeted better than the average consumer.

Plan Ahead And Have A Cushion

In future years, decide beforehand how much you plan to spend, and stick to this number. Once you break your budget, the sky’s the limit – which means your debt can go sky high too.
When selecting a spending limit, it may be wise to set aside a bit of a cushion as well. Last minute gifts and parties always come up and can suddenly catapult you way over budget. If you have a reserve of say, $200 – $300, you should be fine. And, if you don’t spend it, you’ll come out ahead for the following year.

Buy With Cash Alone

Even though it’s a bit of a nuisance, if you only buy with cash you’ll manage your money much more closely. Leave the credit cards at home, and watch how well you stay within your spending limits. This also helps you to think about how much you spend on each gift.

Compare Prices And Look For Savings Opportunities

Online shopping sites are helpful for quick price checks. Compare at least two or three online stores, especially for bigger ticket items like electronics or digital devices. Also, stay alert for special savings, coupons and free shipping deals.

Check Your List

Do you really have to buy a gift for everyone on your list? A thoughtful card with a handwritten note or homemade baked goods may be the perfect gift.  Another idea is to buy in bulk. For example, with enough planning, you may find a sale on thoughtful, but more generic gift, such as decorative candles or a non-perishable gourmet food item.  Buying in bulk will also save you time, as you won’t have to look for something different for each person on your list.
Get Back On Track
If despite your best intentions, the holidays have landed you in debt, it’s important to face this issue head-on. Don’t ignore your finances – doing so could cause stress and may make your financial situation even worse.  Speak to a trusted financial professional to learn how to set a budget, break the paycheck-to-paycheck cycle, and get on better financial footing.
Loaded down with credit card debt? Consult with a bankruptcy attorney and get back on track financially. Contact us for a free consultation or call (410) 415-0445.