With the holiday season coming in hot, it’s time to start thinking about how you’re going to pay for everything. The National Retail Federation (NRF) found that consumers spent an average of $998 on gifts and holiday items in 2021. Here are a few tips to help you build your holiday budget and stick to it.
Create your budget
Look at what you spent for the holidays last year and ask yourself what was worthwhile and what you’d do differently. Be sure to consider money for gifts but also money for travel, decorations, and hosting. Do you have enough money on hand to spend the same amount as last year, or do you have less cash available? Could you drive to visit family this year instead of flying? Make a budget (and a plan) based on what you can afford right now.
Start saving early
Now that you have an idea of how much your holiday budget should be, start saving. After you’ve paid your monthly bills, set aside a little money from each paycheck and put it toward your holiday budget.
Get creative with gifts
You don’t have to splurge to show friends and family how much you care during the holidays. There are a lot of really cool and unique items that don’t cost much at places like thrift stores, or Etsy. Even better, think about making your own gifts—they’re very personal, and you can make a lot of them for almost no cost.
Stick to your shopping list
Make a list of what you need in each of your identified categories (gifts, decorations, travel, hosting, etc) and stick to it. You can even create a budget for how much to spend on each person on your gift list. If you only buy what you’ve budgeted for, you’ll stay on track and avoid overspending.
Understand Buy Now, Pay Later
You might decide to use a buy now, pay later (BNPL) service during the holiday season, but make sure you understand how it works before you commit. BNPL can be a good way to split purchases into weekly or monthly payments, but it can also end up costing a lot if you aren’t careful about looking out for fees and interest.
Track your spending
Stay on top of your spending by monitoring it using an app like Brigit. By keeping an eye on your spending habits and upcoming bills, you can adapt your budget as needed to make sure you don’t overspend and don’t take on debt.
