Has the New Year ever rolled around and you felt regret for how much money you spent over the holidays? If you’re like most people you tell yourself in November, “This year will be different. I’m going to make a plan and stick to it.” The challenge is most of us end up year after year wondering how did I get so far off track and overspend again?
It’s not hard to get wrapped up in the holidays and walk into the New Year with a stretched waistline and busted budget. To avoid another year of regret from overspending, follow these three simple steps to finally succeed with holiday budgeting.
Step 1: Prepare
You must make a list of everything that you want to do and buy throughout the holidays. This includes travel, gifts, decorations, activities and food. At this point it’s ok to dream a little bit and write down everything you would want to do if money was not a factor. You must write it down even if you think it is as ridiculous as the ugly Christmas tree sweater your co-worker insists on wearing every year to the office. If you don’t write it down, that will be the thing that the third cup of eggnog convinces you to buy later and bust your budget.
Next, look at your monthly budget. Did you know most people waste or spend unnecessarily $400-$900 a month! This is typically on things like eating out, impulse buys on Amazon or the daily pumpkin spice lattes every day at the Starbucks drive thru. Throughout the holidays you can easily redirect that money towards funding your gifts, food and other traditions rather than racking up a frosty the snow man size credit card bill.
Step 2: Prioritize
Think back to your childhood. What do you remember most? Was it a toy you received or a family tradition? I can’t say I remember a specific toy, but I do remember how my siblings, cousins and I felt super fancy drinking a Shirley Temple out of a stemmed glass. I also remember the traditions of matching pajamas on Christmas Eve and rotating who got to put the Angel on the tree. Can’t forget about the giant cinnamon rolls and other pastries for breakfast Christmas morning. The point is if you are a grandparent or parent, focus on creating memories and spending time together rather than overspending on gifts that will probably be tossed aside in the weeks following the holidays.
Step 3: Pull-the-Plug
Temptation is everywhere! The store aisles are filled with stocking stuffers and the black Friday deals can make it easy to want to fill your shopping cart as if you’re a kid in an Easter egg hunt. Stay strong and stick to your list! Remember the phrase it’s the thought that counts? Once you check off your list, avoid the stores altogether. Put down the sales flyers and start enjoying the holidays with family and friends.
If you have trouble pulling the plug on shopping, have an accountability partner. This could be your spouse, friend or co-worker that you check in with often. Show them receipts after each shopping trip and track your spending as you go. They will keep you focused on your list and remind you of how you will be glad come the New Year that you had the discipline to pull the plug.
As we approach the holidays, stick to these three simple steps and you will be set up for a financially strong New Year. While many people will dread the January credit card bill and look like Rudolph hiding from the abominable snowman, you will be stress-free and set up for success.