It's that time of year again, and families around the country are feeling the familiar pinch in their pockets from the financial stress of the holiday season. From gift giving to playing host to friends and families during the holidays, there are numerous reasons why your finances may be feeling a little depleted.
So what can you do to overcome that spending hangover? Start by recording all your holiday expenses, from the smallest stocking stuffer to the extra groceries for entertaining. If you can figure out what you spent this year, you can create a budget and a line for next year.
Here are several benefits that could arise from planning ahead for the holiday season:
- Less Last-Minute Spending: Through the budget creation process, you allow yourself more time to determine what you can afford for entertaining and gift giving. This minimizes the chances of overspending on last-minute gifts or afterthoughts.
- More Opportunity to Take Advantage of Pre-Season Sales: One of the greatest advantages to having a budget in place is that it reminds us of what's ahead. Pay attention to sales and promotions and purchase a gift on sale in advance.
- Improve Your Credit: By planning ahead and being better prepared for future holiday spending, you have a better chance of paying your regular monthly household bills on time. The last thing you want to do is skip a monthly payment or pay a late charge because holiday gift buying took a priority.
- Reduced Use of Credit Cards: If you primarily use your debit card or cash for holiday spending, you reduce the risk of that surprise credit card bill with a balance that you can't pay in full. This tends to be the greatest contributor to the spending hangover and gives people the worst headache.
- Make a Lifestyle Change: As long as you're in the process of incorporating this year's holiday spending into your budget, why not make plans to include other gift giving spending as well. It's so much easier to be prepared for that upcoming wedding, retirement, or birthday gift when you have established an amount ahead of time and are prepared for it.