How Do I Budget for Holiday Shopping?

How Do I Budget for Holiday Shopping?

by | Dec 1, 2021

Holiday shopping is always a stressful experience. One reason behind this is the delays and shortages in the supply chain that start to occur near the holidays. As a result, there can be severe product shortages and price increases when the supply chain is not working correctly.

So, naturally, this can make shopping around the holiday season more expensive. But even with an early shopping year, you can still achieve a holiday shopping budget. If you want to be more financially responsible and stay on a budget this holiday season, here are some great tips to follow.

Set Holiday Spending Limits

As exciting as they are, holidays can be costly. Holiday budgeting is a great way to ensure that you don’t end up exceeding your spending limits. Here are a few things to consider when you’re setting your holiday spending limits.

Consider Your Income, Monthly Expenses, and Debt

It’s essential to know your current financial standing before you can set a budget for the holidays. Ideally, it helps if you start managing your income and expenses months before the holiday season. That way, you can cut out extra expenses, avoid debt, and add more to your holiday shopping budget. You can also do this by picking up on extra jobs around the holiday season to increase your income.

See How Much You Spent Last Year

Last year’s spending can give you insight into how you should budget your expenses this year. If you spent more than your financial capacity last year, observe where you went wrong and try to avoid the same spending mistakes this year. However, if you spent responsibly last year, try to follow the same guidelines this year.

List What You’re Spending Money on This Holiday Season

Before making a budget, list everything you need to spend on. Your budget should cover your shopping, travel expenses, gift wrapping, decorations and any other activities for a holiday. Once you’re done making a list, make sure you don’t overlook any essential expenses or add unnecessary ones.

Track of Your Holiday Shopping

Once you’ve made the budget, you have to stick to it. You can do this by keeping track of your expenses and ensuring they don’t exceed their allotted amount. Here are some great ways to track your spending and budget for holiday shopping.

Tools Available Through Banks and Credit Holders

To better manage your holiday budget, you can set up a separate space through which to spend. For example, some banks allow you to split the money in your account into different “spaces”, such as one for emergencies and one for holiday spending. You can allot a certain amount of money into this space and spend purely from the allotted amount. You can also save money in this space throughout the year and use it once the holiday season arrives.

If you’re using your credit card to pay for holiday purchases, you have to be careful not to negatively affect your credit score. So, remember to pay all your bills on time and don’t go over your spending limit.

Save Receipts to Track Spending

By saving receipts, you can easily calculate how much of your budget you’ve spent on a particular category, like gifts.

Use the Envelope System

The envelope system is like the space system we discussed before but uses cash. It requires you to make a separate envelope for each spending category, like gifts or decorations. The budget allotted to that category is stashed away in the respective envelope. Then, each time you purchase within the category, you take out money from the envelope. This way, you can determine how much you have spent in each category and what amount is left.

Ways to Make More Room in Your Holiday Budget

If you find that your budget is too limited, here are some practical ways to increase your budget this holiday season.

Reduce Unnecessary Costs

Analyze your total expenditure and try not to spend on things that aren’t necessary. Then, the money you save can be added to your holiday budget instead.

Take On a Holiday Job

Try and look for manageable jobs like babysitting, which can help you bring in more income. This extra money can go toward your holiday budget.

Utilize Public Transportation

By using public transportation, you can save cost on fuel and maintenance of your vehicle. In addition, you can use this money to splurge on holiday shopping!

Premier Credit Monitoring.

Receive premier credit monitoring and identity theft insurance for you and your family with our MAX plan.**

*Source: Fair Isaac Corporation.

**Underwritten by AIG.

FICO is a registered trademark of the Fair Isaac Corporation in the United States and other countries.

Copyright © 2023 IDIQ® provider of MyScoreIQ® services | All Rights Reserved

Follow us on social