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Overspending on holiday gifts can have a long-term effect on your budget.
posted in: Financial Wellness
by Joe Buhrmann, Manager, Planning Support

Don’t Let the Holidays Keep You from Reaching Your Financial Goals

You’ve worked all year to pay off debt, save for an emergency fund or put more away into your retirement account, but the holidays returned, and again, your spending has derailed your best-laid plans. There’s still a chance to get back on-track and to keep moving forward toward your goals.

What You Can Do Now to Avoid Overspending

1.    Create a budget

In the latest COUNTRY Financial Security Index, one in five Americans admitted to not having a holiday budget. Are you in that category? You may have already started shopping, but drafting a budget to help with the rest of your holiday spending can help to keep your spending in check.   

Start by making a list of the people you need to buy for and what you can realistically spend on each person without going into debt. It’s ok to spend less this year. In fact, according to the latest COUNTRY Financial Security Index, 3 in 4 Americans are planning to spend the same amount or less than they did last year.   

Check your progress on your budget, and reassess often. And, don’t forget about the other things you’ll spend on besides gifts, like decorations, entertaining and travel. Budget for them now so you’re not surprised later.

2.    Find ways to earn extra cash

Nearly one-quarter of Americans admit to working extra hours, taking on additional jobs or selling items  to pay for holiday expenses, according to the COUNTRY Financial Security Index. These strategies can be a better alternative to putting purchases on a credit card, which 13 percent of individuals plan to do this year.

Today’s sharing economy makes it easy to earn money when it works for your schedule. Look for items you can sell online, or try providing a service like driving for Uber or Lyft or pet-sitting.

3.    Use coupons and rewards points to save on gifts and travel

Take advantage of coupons, discounts and rewards points that may be available from many online sites. Some sites even allow you to use the discounts in-store.  Don’t forget to utilize rewards points you may have accrued, and don’t forget about airline mileage points, either.  While many of us will never have enough points to garner a free flight, many of these can be turned into gift cards, subscriptions and other travel-related gifts – perfect for gifting or to use for holiday travel.

What You Can Do to Start Planning for Next Christmas

1.    Start Saving Early

Nearly one-quarter of Americans reported saving throughout the year to afford holiday expenses, and banks and credit unions make it easy for individuals to save by offering Christmas savings accounts. Take a look at the amount you spent this year, and commit to a realistic amount you can regularly deposit to over the coming months.

2.    Create Your Holiday Budget Early

Yes, I mentioned budgeting earlier, but creating your holiday budget early may help you to shop throughout the year and to be more aware of deals on travel, décor and gifts.

Achieving your financial goals is hard work, and so is paying for the holidays, but with some simple steps your holiday plans won’t ruin your progress.  

 

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