According to a recent Gallup Poll, Americans plan to spend a whopping $1,128 on Christmas and holiday gifts this season. That’s up $830 from 2015 and $720 from the previous year.
Consumers are going in the wrong direction!
Of course, retailers are dancing in the aisles over these figures.
No doubt, American’s spend more money during the last month of the year than any other time. We collectively spent over $600 billion dollars during the holidays last year and it’s currently estimated that here in the United States we’ll surpass $800 billion dollars this year.
And it’s not just on gifts. We spend money on food, decorations, holiday outings, travel to and from grandmas, party attire, parties, liquor, and more. The list can seem endless and daunting when you’re trying to figure out your holiday budget.
More often than not, we forget most of what we should include in our holiday budgets and inevitably end up using credit cards to cover the difference.
The calendar then turns to January and the adverse effects of our poor planning and overspending sets in. We’re faced with higher than expected credit card statements, less money to save, a tightening of our belts yet again increased stress and money arguments and extreme regret over the amount of money we spent.
HOW DO WE AVOID HOLIDAY OVERSPENDING?
1. Create A Budget
I’m a firm believer in setting a budget. If you don’t sit down and think about how you want to spend your money, it’s a guarantee that you’ll end up overspending. So the first rule of avoiding the stress and regret that shows up in January is to set that budget.
If you’ve already started your shopping, it’s not too late. You can do a little backtracking and then move forward with completing the rest of the budget. Make sure you take into account all the different categories you should include in your budget.
To make things super simple consider using my Holiday Planner – An Uncomplicated Christmas.
In this planner are all the tools you need to establish your Christmas budget, track your spending, plan your gift giving and stay on track. This way you’re sure not to commit holiday overshopping sins and overspend!
2. Make A Commitment To Stick To Your Budget
If all you needed were a budget to stay on track, you’d be golden. Unfortunately, it doesn’t always work out that way.
This year, you’ve got to set your mindset straight so that when you’re tempted to overspend or self-gift, you’ll have the resolve to stop and run the other way. By making the commitment to yourself, you’re making a promise to do what you set out to do. You agree to set aside rationalizations and justifications for why you need to go over your well thought out budget. You’re promising to stick to your plan.
Try writing out your commitment and putting it on your holiday gift list. When you feel tempted read the promise you made to yourself.
3. Refrain From Self-Gifting
I’ve got to be honest here and say I did this all the time back in the day. I probably spent more money on myself than for others on some shopping trips.
Boy, I understand how easy it is to get caught up in the self-gifting phenomenon. According to the National Retail Federation, nearly 60% of people self-gift and will spend, on average, $130 per person on themselves.
And this doesn’t just happen in brick and mortar stores. It happens on-line too.
Of course, if we stick to our budget, we’ll be less likely to include gifts for ourselves in the mix. Just being mindful of this will certainly help to deter you from spending needlessly on yourself.
4. Don’t Use Credit Cards
My holiday budget is pretty hefty. In my recent article, A Sneak Peek Into My Holiday Budget, some readers wrote me privately and was shocked at how much I budgeted. But if we are honest about our budget and include everything that needs to be in there, it comes with a hefty price tag.
None of it was or will be paid with credit cards. I set aside money every month for Christmas so at the end of the year I don’t have to worry about how it will all get paid for – I’ve already got it in the bank.
I implore you to refrain from using credit cards this year. It’s the number one reason you’ll end up with stress and regret in January.
5. Find Alternatives to Expensive Gifts (aka Don’t Keep Up With The Joneses)
We all want to be Rockefeller at Christmas, but we don’t have the resources. If you decide that you want to be a big wig and buy the best and most expensive gifts for friends and family despite the fact you can’t afford it, then you are just foolish.
Be realistic about what you can afford and look for alternatives for expensive gifts. Most people prefer something heartfelt to expensive any day of the week.
In my article, How To Give Generously When You Don’t Have A Nickel To Spare offers some advice on how to give generously from the heart when your resources are limited. You might find some ideas that will help you manage your holidays and budget better. Give it a read!
Follow these five tips and you’ll end up with less stress and regret come January. You’ll start the year off right without any new debt knowing you were responsible for your gift giving activities. In the end, you’ll be much happier knowing you didn’t fall for holiday overspending.