How to Avoid a Holiday Spending Hangover

Ah, the holidays are here…the most wonderful time of the year! Although your wallet may not think so. All too often, I see people entering the new year with a debt hangover from all the unexpected expenses that pop up over the holiday season. Here are some tips to create a holiday budget that won’t make you feel like the Grinch…

1.       Be realistic on setting your bottom line

A general problem I have with budgeting is that we often budget based on how we think we should spend money, not on how we actually spend money. That’s why it can be so challenging to stick to one!

So go back to last year – what were your actual holiday expenses? How much did you spend on gifts, tips & gratuity, travel, festive attire, charitable donations, home décor, etc.? Start to look at these numbers and see what you can trim down or eliminate. Then consider if there are any changes this year to holiday plans to understand what realistic spending looks like for you.

2.       Decide how you are going to pay

If this bottom-line number is not something you have set aside already, consider your options for funding your holiday expenses. While using credit cards to gain points & miles is appealing, it can be a slippery slope to overspending (which can be especially dangerous in this current high interest rate environment). Be aware of the interest rates on your credit cards if you are carrying (intentionally or unintentionally) a balance into the new year.

3.       Stay focused on you

There is a lot of pressure to spend during the holidays. I want you to enjoy the holiday season without putting yourself in a negative financial situation. And I believe your loved ones wouldn’t want you feeling financial pain because you have over-given. You will be able to be more present & experience more of the joy of the holiday season if you are not stressed about how much you are spending. So, stay focused on your budget & how you’re doing, not on what others are doing around you.

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