Every year the holiday season from Thanksgiving to New Year’s with all of its various types of expenses presents a major challenge of whether you would manage not to go overboard with your spending and stick to a healthy and reasonable budget.
The challenge this year seems to be even more formidable considering both the spiking inflation and the still-lasting supply chain crisis, which has left a lot of types of goods in short supply.
Against the backdrop of this doubly challenging situation, you can easily end up with your biggest holiday season spending ever, and, if you are not careful, you may derail your finances for a really long time.
Avoiding going into a financial morass simply by spending money on the holidays could be relatively easy as long as you manage to do some reasonable planning ahead of time, exercise some practical restraint, and implement a certain level of organization.
It is no secret that the last six weeks of the year tend to be not just the most costly ones but may also end up being more expensive than the preceding 46 weeks combined.
That is why having a not very complex but steady and common sense spending strategy as you are about to go into the holiday season could go a long way towards preventing you from squandering big amounts of money for no rational reason.
In order to avoid that and to be able to start the New Year in a good financial condition, you need a reasonable strategy to replace the typical “but-it’s-the-holidays” attitude, which could inflict serious damage on your financial health.
From Thanksgiving till Giving Tuesday
One of the main things to keep in mind about Thanksgiving is that it certainly isn’t a certain dot on the calendar timeline, and that it features more than one occasion on which you might be tempted to decide to part with your money.
The full Thanksgiving holidays now go from Thanksgiving Day, all the way to Giving Tuesday, with Cyber Monday, Small Business Friday, and the ubiquitous Black Friday dominating the period in between.
The other crucial factor to take into account refers especially to 2021: namely, the fact that consumer price inflation is the highest in more than 30 years, with just the price of bacon alone spiking by over 20%.
That is why it is imperative that you have a spending plan in place for the entire holiday season already well in advance of Thanksgiving Day.
Hopefully, you have survived Thanksgiving in a decent financial state, and can direct all of your attention towards Christmas and New Year’s.
Some of the most important things to plan for with respect to the Christmas holidays are the cost of parties and gatherings that you will attend where you’d typically be bringing wine or other drinks or treats.
It’s essential that you don’t allow the holidays to rob you of your will to prepare your own meals, and fall into a series of nights of relying solely on pricy carry-outs – as this might mean an extra $1,000 in holiday season spending.
When budgeting keep in mind not just the cost of travel – which could include anything from gas money to air travel and accommodation – but also airport meals since those tend to be very pricey and may go unnoticed as you prepare your holiday budget.
Certainly, there are practically no Christmas and New Year’s holidays without the gifts – and since you might be tempted to succumb to excesses there with the goal of giving joy to your loved ones, it’s essential that those are carefully budgeted through the creation of a gift list that is as detailed as possible.
For the gift list to really work and save you money, it should be put down in writing as opposed to just thinking it through in your head – so as to really factor it in your overall plan for holiday season spending.
One of the main pitfalls to avoid here is the urge to “even out” the amount of money that you will spend on each person’s gift.
Spending exactly the same amount of money on every one of your loved ones and your friends is completely needless and could be counterproductive.
Instead, you should strive to keep the spending per person below a certain threshold and focus on finding the best, most meaningful gift for them even if that means that it is cheaper for some than for others.
Another important spending factor to account for in your holiday spending plan is charity.
Having it as part of the plan would allow you to donate a reasonable amount of money without regretting later spending too much and causing your finances to be in trouble.