The holiday season is swiftly approaching. With the rise of the Omicron variant, impending lockdowns, and global supply chain issues- who’s to say what’s next! The pressure to get all your holiday shopping done while maintaining a budget is on! Yet one thing is always for certain, the holiday season is synonymous with spending. If we’re not too careful we can often break our budget for the upcoming New Year. Splurging is tempting, but simultaneously it’s important to maintain mindfulness of a budget. Before a deep dive into your loaded Christmas list- let’s take a moment to compartmentalize and assess how to manage your holiday finances with these four easy tips. Budgeting doesn’t always have to be stressful! Implementing these tips will guarantee a less financially stressful holiday season.
1. Allocate a spending plan
The initial steps to setting up a personal budget is to allocate a spending plan. This tool is essential because it allows you to track your monthly spending habits. Get your financial statements together then start by subtracting your mandatory expenses from your income. From there determine how much will be spent on miscellaneous holiday spending. A spending plan will help get a handle on expenses.
2.Make a list to identify the costs
The best way to determine how much money to set aside is to identify the costs. In your list label the cost of every item, and label how much you want to spend on each purchase. If you’re over your expenses then adjust the list by removing anything over budget until they match how much you’re willing to spend. Adjust your list accordingly so that spending doesn’t exceed savings. (This is key!)
3. Avoid Debt
According to a statistic by Nerdwallet “roughly 48 million Americans are still trying to work down their holiday debt accumulated last year.” Avoid falling into the (easy) trap of high credit card interest rates by spending over your means!
4. Save to Focus on Future Financial Goals
The holiday season is the perfect time to find deals and potentially set aside money for the future. Don’t overspend in the short term, instead, take the time to focus on future financial goals. The new year is always the perfect time to reflect for a financial restart!
The holidays can be stressful when budgeting. Turning financial wellness into a lifestyle can alleviate money stress year round. At Financial Fitness Group our goal is to promote financial literacy through a holistic approach. Financial literacy is the ultimate gift that can last a lifetime.