Smart Seasonal Spending to Protect Your Wallet

The onset of the holiday season always sparks the same question: How can I give back and do all my spending without breaking the bank?

The answer is simpler than you may think! The key is to make a budget—and stick to it. Here are a few tips to help you ensure that this time of year is merry and bright instead of merely stress inducing.

Set a Budget

Overspending spikes this time of year: nearly 40% of Americans say they go over budget, according to the National Retail Federation. The best way to avoid this is to establish a reasonable limit based on your current income and expenses.

1. Assess your income for December, factoring in any bonuses or other extra cash.
2. Review your essential categories, such as housing, transportation, groceries, and utilities. These funds are nonnegotiable.
3. Consider where you can cut back on discretionary categories, including entertainment and dining out.
4. Determine how much you’ll have left over to put toward holiday spending.

Evaluate Your Spending Needs

Another valuable strategy is listing all your anticipated expenses for the season to gauge the total amount you may expect to spend. You can do this either ahead of or following setting a spending limit. Do it before, and you can get a better idea of how much cash you may need to try to free up. Do it after, and you can see where to adjust to minimize costs. It all depends on your priorities and means!

Some likely expenses include:

• Gifts: Write down everyone you intend to shop for, from family and friends to coworkers and neighbors.
• Travel: Consider all potential elements beyond transportation, such as accommodations, food, and luggage.
• Food and entertainment: If you plan to host and cook, plan for bigger grocery and utility bills than usual.
• Decor: Did some of your decorations not make it from last year? You may decide to get new ones to ensure a festive atmosphere.
• Charitable donations: Which organizations do you want to support, and how much do you want to give?

Shop Smart

Aside from planning ahead, there are a few other ways to help prevent January credit card stress.

• Use cash back or rewards, but be strategic. Avoid running up balances you can’t pay off quickly.
• Compare prices across multiple retailers, and use browser price-tracking tools.
• Be cautious with “too good to be true” online deals, especially from unfamiliar retailers.
• Keep receipts, track your purchases, and watch for unexpected or recurring charges.

Give Back in Different Ways

Holiday altruism is meaningful and impactful for everyone involved. Per a M+R report, December accounts for one-fourth to one-third of annual nonprofit revenue. Meanwhile, giving and volunteering can improve your mental well-being and reduce stress.

However, it should be done in a way that aligns with your financial situation. Aside from monetary donations, there are several other options to consider, including.

• Donate gently used items you no longer need, such as books, clothes, or household goods.
• Volunteer your time at a local nonprofit.
• Help out neighbors in need with outdoor chores or homecooked meals.
• Write letters to children at local hospitals or soldiers stationed overseas.
• Organize a community event.

Whichever idea you run with, this is a great opportunity to include your kids, helping to reinforce the value of gratitude!

This holiday season, prioritize joy instead of stress. With careful planning and smart moves, you can better ensure that you create a festive experience for you and your loved ones without the excessive spending.