Holiday Spending Tips to Keep Your Finances on Track

When the holiday season rolls around, it's easy to get a little out of control with your finances. After all, this time of year is one when nearly everything you do costs money. Are you attending a gift exchange? Make sure you have a gift for everyone in attendance. Are you visiting loved ones? You'll need the cash for a plane ticket or fuel for your car. Even happy hour drinks can add up when you're spending time with friends. 

But the last thing you want to do is dig a financial hole that you'll have to climb out of come January. Instead of going wild with your spending this year, review the following eight best holiday spending tips to help you rein in holiday spending and stay on track at the end of the year.

Establish a budget (and stick to it)

Creating a budget for holiday spending is essential, but it's even more necessary to adhere to it. Figure out how much you can afford to spend and allocate the total accordingly, splitting it among gifts, travel and other expenses. When you reach your limit in a particular category, you may want to skip out on the next outing that comes with a cost or reallocate funds from another to cover it. For example, if your flight home costs more than expected, you could trim your gift budget and go smaller or try DIY gifts.

Keep a copy of your list nearby whenever you go holiday shopping. Keep it digitally on your phone and pull it up when you're shopping to ensure you're not going over your budget limit. 

If you struggle with maintaining a budget, implement a cash-only spending rule for holiday expenses. It's easier to overspend when you're swiping a card than when you're handing over your hard-earned cash in the shop. Of course, using a credit card isn't always a bad idea, especially if you can keep your spending in check. But if it's too hard to pass up non-essentials or remain within your budget, get cash and use it to buy gifts.

Find the best deals

When you know what you want to buy for everyone on your list, it might be tempting to head into the nearest store and cross everything off in one go. But you'll likely spend a lot more if you take that approach. Instead, focus on getting the best deals. Shop around, use online tools and compare prices to ensure you're not overpaying for a single gift on your list.

If the cost of gifts is too much for you to bear this year, don't fret. Many people face a challenging financial situation due to rising inflation and economic swings. Your circle of friends or family might have similar feelings about holiday spending if you chat with them about it. You might establish a lower spending limit, give homemade gifts or even forego presents altogether.

Adjust your standard budget

Another way to keep costs down during the holidays is to trim extra everyday spending. Look at your monthly budget to see what expenses you could go without for a month or two. Consider canceling a subscription, simply placing something on a temporary pause, eliminating some of your streaming services or cutting the cable cord. 

Other options include 

• Cooking instead of dining out. 
• Brewing your coffee at home.
• Working out at home instead of paying for a gym membership. 

If you can trim your monthly expenses by the amount you'll spend over the holidays, you won't feel the financial crunch come January. 

Consider group gifts

When you don't want to spend a lot but still want to give a meaningful gift, you could always go in on something with other people. By pooling your money, you can purchase a higher-priced present than you could get by yourself. Chat with friends and family about buying gifts together instead of purchasing items individually.

Organize a volunteering event

It's easy to get caught up in the material side of the holidays, but the reality is that many people struggle to meet their basic needs. During this time of the year, it's challenging to go without food or gifts for children. You could sponsor a child by purchasing a few holiday gifts if you have extra money in your budget.

Another idea is to organize a group volunteering event instead of a holiday party with friends or family members. Invite your loved ones to participate in the event, in-person or virtually, and make a real difference for those around you. If you need help figuring out where to start, check out VolunteerMatch, a nonprofit organization with a vast database that includes thousands of volunteering opportunities across the nation.

Start shopping early

If you habitually wait until the last minute to buy gifts, this is the year to change that habit. Shopping early can help you get the best deals, as you have plenty of time to compare prices or order items online and wait for them to be shipped. Some people shop all year, keeping an eye out for gifts that their loved ones would enjoy. But even if you start in November, it's better than heading out on Christmas Eve to shop. 

Earn rewards when you shop

Before you start shopping, ensure you maximize your potential to earn rewards. Start by getting a credit card that rewards you when you make purchases if you don't already have one. A cashback card is an excellent option, since it allows you to get money back for every dollar you spend. You could also increase your earnings by signing up for free shopper cards and loyalty programs with the retailers you frequent. 

Give the gift of time

Another way to control holiday spending is to give the gift of your time. You could offer to babysit your nieces and nephews to give their parents a night off. If you have a friend traveling this year but are worried about who will take care of the dog, you can offer to do so free of charge. You could spend a few hours with a family member who feels lonely during the holidays. The gift of time is always valuable, and it doesn't cost you anything to share with others. 

The last thing you want is to turn a joyful and memorable time of year into a time of stress and financial worry. By implementing these tips and shopping wisely this holiday season, you can reduce stress while keeping your finances in check.