If you are receiving unsolicited phone calls from an entity pretending to be ACCC (a trusted non-profit credit counseling agency), please be assured that ACCC’s policy is NEVER to contact you unless you’ve explicitly requested us to call you. Also be cautious of emails from an unusual or unfamiliar domain. ACCC’s domain extension is @consumercredit.com, and any emails using a different extension should be treated with suspicion.
ACCC offers debt relief options to individuals and families that are suffering from stress related to credit card debt by providing effective credit counseling, helping to consolidate debt, and advising on debt management.
With the festive season fast approaching, it’s that time of the year when we look forward to indulging in festivities, gifting, and making memories. However, for many, this is also a time when spending can quickly spiral out of control. To ensure you’re not left with a financial hangover come January, we’ve crafted this guide to help you build a sensible and practical holiday budget. Having a proper financial plan for the holidays can help you manage your overall debt management efforts more effectively.
Use ACCC’s tips on building a holiday budget to stay on track.
Building a Holiday Budget
1. Reflect on Past Spending
Before jumping into numbers, take a moment to reflect on your spending habits from the previous year. Were there unexpected expenses? Did you feel stretched thin with the gifts you purchased? Understanding past spending can guide your future budgeting decisions. This is essentially mean that you are deriving a realistic number for the current year, based on the lessons form your past spending patterns.
2. Determine Your Overall Budget
Establish a total amount you’re willing to spend during the holidays. This should include gifts, food, travel, decorations, and any other holiday expenses. Make sure this number is realistic and doesn’t impede on your essential monthly expenses or savings goals. How much of this budget will be on credit cards? can you allocate enough cash to cover the spends? Or will your saving take a hit? Based on your answers to these questions you will likely plan for a pay off strategy as well as spending strategy for holidays. Building a holiday budget is important for all of these reasons and more.
3. List Out Expenses
Break down your holiday activities and list everything you expect might cost you money:
Gifts: Who are you buying for? Assign a budget for each person.
Travel: Factor in gas, airfare, accommodations, and incidental expenses.
Decorations: Will you be buying a tree? New ornaments? Lights?
Miscellaneous: Think cards, postage for gifts, donations, or any special holiday outfits.
Having a breakdown helps you prioritize and gives you an opportunity to cut down where necessary more objectively. Building a holiday budget is stressful as it is. Cutting down expenses from a joyous time can be even more stressful. By having a budget you can ensure you are within what you can afford and minimize the risk of unnecessary consumer debt.
4. Shop Smart
Start Early: Shopping in advance can help you find deals and avoid the panic-induced overspending that can come with last-minute shopping.
Use Cash or Debit: It’s easier to track spending when you’re using cash or debit. If you’re using credit, ensure you can pay off the balance quickly to avoid interest.
Price Compare: Use online tools and apps to compare prices before making purchases.
DIY Gifts: Sometimes, the most cherished gifts are those that come from the heart, not the store. Consider crafting or baking something special.
There are only a few of the money saving strategies you can use. Making smart money choices is a huge part of surviving holiday finances. It is easy to get carried away with the festivities and the tricks the retailers use to attract you to buy more than what you really need. Constantly keeping your spending on check can bring you right back on track.
6. Track As You Spend
A big part of building a holiday budget is a mechanism to keep track of what you spend. Keep a running tally of your expenses. Whether it’s a dedicated app, a spreadsheet, or even just a piece of paper in your wallet, regular check-ins on your spending can prevent any nasty surprises. Money management apps such as CreditU can be a huge help especially at times like this, You can set holiday budgeting goals and keep track on your expenses more vigorously to ensure you are within the comfort levels of your personal finances.
7. Be Ready to Adjust
Even the best-laid plans can go awry. Unforeseen expenses can pop up, so be prepared to adjust. If you splurge on one gift, see where you can cut back elsewhere. Having a buffer for these unexpected event s and expenses is helpful. The preparedness to forego some things is also important. You have to be flexible within the budget you build.
8. Remember the Reason for the Season
Amid the buying frenzy, take a step back and remember what the holidays are truly about love, gratitude, and quality time with loved ones. It’s perfectly okay to set boundaries that ensure you’re financially comfortable. A financial compromise may not be worth a celebration. SO make your money choices carefully.
Building a holiday budget might seem like an added task during an already hectic season, but the peace of mind it provides is worth the effort. When January rolls around, you’ll be grateful you took the time to plan, letting you start the new year on the right financial foot. Happy holidays and happy budgeting!