This holiday season, give yourself the gift of better financial well-being by keeping your budget on track. Between presents, travel and celebratory gatherings, it can be easy to overspend—but sticking to your financial plan is well worth the extra effort. Check out our seven tips for staying on budget this holiday season:
1. Avoid spontaneous shopping. Make your gift list and check it twice—then be sure you stick to it. It’s easy to get carried away in the holiday spirit, so commit to shopping only when you have your detailed plan in hand. See our recent blog post for more tips on savvy holiday shopping.
2. Try to leave emotions out of the equation. Making decisions that impact your budget while you’re feeling strong emotions can be bad news. Whether you’re feeling exuberant about a holiday sale or stressed out and pressed for time, emotions can spell disaster for your budget. To steer clear of making purchases you may regret later, take a quick inventory of your emotions before clicking “buy” or handing over your credit card. A short breather may be all you need to get refocused on your budget.
3. Look for ways to save on everyday expenses. To free up a little extra cash to cover holiday expenses, identify ways to trim everyday expenses. For example, could you cut down your eating-out budget just for the month of December or take a homemade lunch to work for a few weeks? Or maybe you could freeze your gym membership for a month and try free at-home workouts instead. The extra cushion can go a long way in making sure your budget stays intact this season.
4. Think carefully about seasonal income. For many, the holidays come along with a seasonal job or annual bonus check. The extra funds are always welcome, but if you aren’t sure exactly how much you’ll receive, use a conservative estimate in your budget. That way, you won’t be making plans to spend income that doesn’t end up materializing. Better yet, create a budget where you can transfer all or most of the seasonal earnings into a savings or emergency fund.
5. Keep your long-term goals top of mind. What are your long-term financial goals? Whether it’s saving for a house, buying a new car or paying off a high-interest rate credit card balance, find ways to keep your goals front and center. Remind yourself how sticking to your budget is essential to achieving better financial health and ultimately more freedom. Try taping a note on the fridge or setting a pop-up reminder in your calendar to help you avoid shortsighted holiday decisions and stay focused on the longer term.
6. Get the family involved. Many people find their budget works best when everyone in the household is on board with it. If your children are buying gifts for their siblings and friends, help them understand their spending limits and choose appropriate items. Keeping partners, spouses and roommates in the budget loop can also help you stay on track and not feel guilty about having to say “no” on occasion. You might even be able to get the group to opt for a new, lower-cost tradition, such as touring holiday decorations or volunteering instead of going out for a fancy restaurant dinner.
7. Track your dollars and cents with apps. Chances are, you’ll have more expenditures than normal this time of year as your hard-earned dollars are spent on gifts, decorations and other festivities. If your current method of tracking income and expenses can’t manage the increased workload, this could be a great opportunity to try out an innovative tech solution.
If you’re considering borrowing money to pay down existing high-interest rate credit card balances or otherwise improve your financial well-being during the holiday season, a personal loan could be a good fit for your financial situation. With a fixed-rate, fixed-term personal loan through Prosper, you could potentially consolidate your credit card debt with a budget-friendly, single monthly payment.