Shoppers across the country routinely make the holiday season one of the biggest spending periods of the year. American Research Group, Inc., said that in 2015 the average predicted expenditure on gifts equaled $882, which was up from $861 the previous year.
Many holiday shoppers worry about whether or not they will have enough money for gifts, while others anticipate using credit cards or other financing methods to stretch their abilities to spend even further. This can make the holiday season more stressful than it needs to be while affecting finances into the new year.
Budgeting for the holidays is a great way to keep spending in check. With these suggestions and shopping strategies, holiday shoppers can better manage their spending.
· Look at spending from last year. The first step to establishing a budget is to review spending from last year. See how much you allotted to each person and how much you actually ended up spending on those people. Did you go over or under? Think about the other ways you spent money, including on decorations, entertaining, etc. Once you have a clear picture of how you spent your money last year, you can start building a budget for this year.
· Set limits on spending. You may want to be generous with everyone and go above and beyond, but overspending is impractical and can have some grave consequences. Many financial planners recommend shoppers spend no more than 1.5 percent of annual income on holiday expenses, so establish realistic spending limits that won't break the bank.
· Make lists of high-priority gifts. Select the gifts that have the most importance or those you want to buy the most, and budget with them in mind. Resist the temptation to buy extra items in an effort to make gifts look more impressive.
· Keep track of spending. Be sure to keep receipts and maintain a log of all your holiday spending. You will not know if you are sticking to your budget if you do not keep a running tab of all your spending. Those receipts and spending records also will be handy to keep for next year when you have to establish a new budget.
· Correct mistakes promptly. If you spend a little more than intended on one gift, make the proper adjustments the next time you go out shopping. Otherwise, those few dollars here and there can really add up.
Holiday shopping can be expensive if shoppers let things get out of hand. However, by establishing a budget based on prior purchases, and keeping track of spending, it's much easier to stay afloat this holiday season.
