December 1, 2021
The following post was written by KOFE for its Your Monthly Money newsletter.
At some point, you have to stop putting it on your credit card “and paying it off in January.” Just say no!
As if buying holiday gifts for everyone on your list wasn’t enough extra spending on its own, there are also the decorations to buy, the parties to bring food or wine to, the white-elephant office gift exchanges and gift wrap and cards and last-minute shipping costs to consider.
But here’s a step-by-step guide to how you can save money and avoid the guilt that comes with it.
1. Make a plan and stick to it
The first thing you need to do is take a hard look at what is possible. Make a list of all your anticipated holiday expenses – including gifts, decorations, travel and anything else you’re going to spend money on that you usually wouldn’t. Then, immediately trim that down to what is completely necessary.
Next, trim down your usual budget line items (like entertainment or even groceries if you won’t be home all month), and put that money into your new holiday budget.
Now, compare your anticipated holiday spending with the funds you will actually have available to you. They probably won’t match up, but your job is to make them.
Financial experts who overspent themselves one holiday or another recommend this too: make a plan! It’s easier to say no to temptation when you have a clear picture of what you can afford.
2. Be upfront with your loved ones
It’s easy to get into the habit of estimating what you think your friends or family will spend on you for the holidays, and then spending the same on them. But your budget is not the same as theirs, and we all know that money isn’t an indication of how much you love someone.
Having uncomfortable conversations early will pay off. You can tell your mom that you don’t have the money to participate in this year’s extended family gift exchange. You can ask your friends to set a $10 limit or draw names instead of getting every person a gift. No one wants you going into debt to buy them a throw pillow or a bracelet they’ve been eyeing.
3. DIY! DIY! DIY!
Once you’ve made your plan and set reasonable expectations for yourself, take stock of your own abilities before spending any cash. Can you draw? Bake? Play the guitar? Crochet? Now is the time to put those abilities to use.
Your loved ones would rather you make them a 15-hour Spotify playlist or a hand-drawn portrait of their beloved cat than buy them something that will make you late on your rent.
Warning: be careful about deciding on a Pinterest project before realizing all the materials will cost you nearly as much as you were trying to save.
4. Analyze your assets
In the same vein, consider re-gifting anything you got last year but barely touched. If you’re short on cash, consider selling some gently used clothes or books online. And dig through your wallet or old purses to see if you have any unused gift cards you forgot about from last year. You probably have more help waiting in your house than you realized.
5. Avoid online and window shopping
Unless you have a specific goal in mind, do not just shop around for gifts. If it’s not something you already planned on buying, then it doesn’t matter if it’s on sale. Put on your blinders, and don’t go to the mall without a good reason.
6. Just say no
Sometimes, the answer to saving money is just opting out. No one is forcing you to do anything, and you are welcome to just stay home from the fourth potluck or not decorate every inch of your home.
If saying no this time of year makes you feel like a Scrooge, get a little creative. Make something for the potluck out of the staples you already have in your home, or turn up empty-handed and take on the responsibility of dish duty. And a string of popcorn and last year’s tinsel on your mantel is just as festive as brand new lights and ornaments.
7. Remind yourself it’s OK
Talk yourself down from the overspending ledge by remembering a few things: The holidays aren’t ruined when you don’t spend a bunch of money on gifts. You can and will show your love for people in different ways. No one will remember this by January except for you, when you look at your credit card statements. It’s all going to be OK.
8. Start saving now for next year
Finally, capitalize on any anxiety you’re feeling now by getting a head start on next year. Return to step one, pull together a loose plan and start saving ASAP. Your future financial self will be happy you did.
Discover More Financial Tips
Want more tips on saving money and smart shopping? Check out KOFE’s financial education tools. These resources are free for La Cap members and can help you tackle a range of issues, from budgeting to getting out of debt.