It is easy to get carried away with our spending habits during the festive season, and it is often only at the end of the holidays that we realise the extent of all the extra expenses we incurred as well as the damage that our shopping impulses have done to our bank accounts, adding to the financial baggage.
It’s also easy to not think about it during the holidays, as you’re very busy and having a lot of fun. But, thinking about it is imperative. It will help you to stay on track to meet your financial goals and will keep you secure for the new year.
To avoid adding financial pressure to your future self, create a budget and save as much as you can. You will thank yourself in the long run.
We’ll make it easier for you, by outlining how to go about your budget below.
Create & stick to a budget this festive season
The first thing you need to do is commit to creating a reasonable budget, and promise yourself that you will stick to it too! You can get your family involved in this to keep you accountable, or even to teach your kids about the value of money.
This budget will help you to spend only when necessary, and will give you relief in the new year when you can afford all the start-of-year costs.
So, how do you create a holiday budget?
Tips for creating a holiday budget:
Follow these steps to secure your holiday finances!
Assess your current income streams
Calculate the amount of money you have incoming, after taxes and deductions. Then calculate your recurring monthly expenses. Find out how much you have left after subtracting the expenses from the income.
Thereafter, you will know how much money you have to work with for the holiday period. Remember, many of us get paid early in December - meaning this money has to stretch further than it usually does!
Make your budget realistic and affordable
It is important to make sure that your budget is realistic and affordable.
It is exciting to plan getaways, day trips, activities and gifts for friends and family. However, you should remember that all these things add up and become very expensive. Put a limit on how much you can actually spend without dipping into your savings or taking out additional credit or accounts.
In fact, you should plan to spend only a portion of your left over income after expenses. This is to ensure that you have money available should something urgent and unexpected come up.
You should also not limit yourself excessively, as that will lead to frustration. Think about dieting. When you think about never eating chocolate again, all you want to do is eat chocolate. But if you allow for a small amount of chocolate, it’s much easier to stick to the plan! The same can apply with your budget and spending.
Find a good balance and ensure you have breathing room with the money you have available to you.
Analyse your spending from last year
A good way to plan ahead is to have a look over your spending from last year’s holiday season and decide what expenses were really necessary, and what you could cut back on.
Then make a list of the things that are necessary and are within your limit.
Find the most affordable shops and stick to these
It’s inevitable that you will need to spend some money. But there are ways you can save while shopping!
Do a shop comparison to see where you can get the items or services for the best price. This way you pay the least possible, for what you need. You can also use loyalty cards (like SmartShopper at PicknPay, Checkers Xtra Savings, Clicks Clubcard) to make extra savings and get perks.
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Decide what your holiday priorities are
Group your festive season expenses, such as gifts, food, travel, special events and everything big and small in between.
Then, allocate part of your income to each group, considering your monthly expenses, and ensuring that you have some money left over.
From there, you can plan a way forward. And remember, you should track your spending as you go to ensure you’re staying on track!
Get creative when it comes to presents, food and decor
Get creative when you are planning your holiday budget! Your innovative ideas could save you a lot of money.
You can have home-made gifts and décor, and find cheaper ways to entertain guests such as having a movie night or playing board games.
How to save money on gifts and decorations:
Want to save money on gifts and decor? Here are 6 ways to do that!
Consider thrift shopping!
Use recycled goods to make something special and unique for the ones you love.
Opt for digital gifts. You could create a digital photo album, or make a music mix for free.
Skip the cheesy, store bought gift cards and make them online or by hand.
Limit your gifts to only certain people.
Make a family agreement to do a secret Santa or a gift exchange so that everyone only needs to buy one gift.
How to save money on holiday season meals and hosting
There are always ways you can save on meals and family/friend events!
Everyone can contribute to the meal by bringing one item. That way the cost is split, rather than you having to pay for everything.
Avoid buying takeout.
Plan how much food is needed, so that you don’t end up with a lot of waste.
Don’t choose recipes with ingredients you’re never going to use again.
Stay in and have quality time rather than going out and spending on activities.
Know that saving during the holiday season is still possible
Never underestimate the importance of saving!
If you put any extra money you may have this holiday season towards savings or paying off accounts, you will be rewarding yourself in the future! A budget tailored specifically to your holiday expenses will help you keep track of your expenses, save and bring you into the New Year with less financial stress.
Celebrate your festive season differently this year, create a budget you will adhere to, and save yourself some money.
Don't let debt ruin your holidays!
If you are struggling to manage your finances and more importantly, meet your debt repayments, contact DebtBusters to speak to a financial consultant, who will assess your current financial situation.
Holiday debt is not uncommon, but you must be aware of your financial situation and take the right action to reduce your debt.