The holidays are a time of giving, from traveling to see family and friends to shopping for gifts. For many people, all of this spending can add up quickly. During the 2017 holiday season, American credit card debt rose at the second-fastest pace in 10 years according to the Federal Reserve.
You can ease some of the holiday stress about overspending by taking some time to create a holiday spending plan. Here’s how to get started.
1. Set a realistic budget and stick to it
Your holiday budget should account for your usual monthly expenses, as well as any extra money you plan to spend on gifts, holiday travel, or meals. Use this monthly budgeting tool to figure out how much you usually spend in a month on essentials like rent, utilities, and groceries. Then, based on what you have left, decide how much you can afford to spend this holiday season without going into debt.
When it comes to buying gifts, make a list of what you need to buy, who you’re buying it for, and how much it will cost. This can help you avoid making impulse purchases, while also making sure you stick to your budget.
2. Shop smarter
When you’re out shopping for the holidays, only bring the amount of money you plan to spend. Buying gifts with cash saves you from the temptation of using a credit card and spending more than originally intended. This can also help you avoid interest or late fees from credit cards.
Checking out the sales offered by stores both online and in-store can also save you money. Start monitoring and comparing prices early—Black Friday and Cyber Monday often offer some of the season’s biggest discounts.
As you shop for holiday gifts, keep track of where your money is going with our spending tracker . Once the holiday season is over, compare it to the budget you filled out to see if there are any unexpected expenses or impulse buys you made that surprise you.
3. Give creative gifts
If holiday gifts are a part of your family’s tradition, consider homemade gifts as a meaningful way to give. You can also “gift” someone your time by offering to do something for them, like cleaning, cooking, or offering a ride.