If you’ve ever emerged from the holidays cash poor and buried in credit card debt, you’re not alone. About seven in 10 Americans (69%) have exceeded their holiday budgets in the past, according to a recent survey by TD Bank.i And 2022 holiday sales are expected to increase by about 8% over last year, according to the National Retail Federation.ii
Consumers expect to spend an average of $1,455 per household for holiday expenses this year, which is about the same as the previous year, according to a survey from Deloitte.iii About a third of that is for gifts, with the rest going to socializing, entertaining and home furnishings.
But giving gifts and making merry doesn’t have to empty your wallet. Generosity is an admired quality, but if you tend to spend more than you can afford on holiday gifts and events, here are a few tips to help you survive the holidays without running up your credit card debt:
Set a budget. This seems obvious, but it’s a step that a lot of people skip. Take a minute and really think about how much you have available to spend this season, and what you’ll need to spend it on. Include everything—gifts, wrapping paper, décor, cards, shipping, entertainment, socializing, and travel expenses. Divide up your available cash by category—then stick to it.
Make a list (and check it twice). Now that you have some idea of what you want to spend on gifts, divide it up by recipient. A simple Excel spreadsheet can work for this. Then track how much you’ve spent on each person. You’ll be much less likely to pick up “just one more” gift for your mother-in-law if you know you’ve already hit your budget for her.
Start shopping early. You may be able to save money if you start earlier in the year rather than frantically wrapping up your holiday shopping in the final days. In fact, according to a survey from Coinstar, most people purchase their gifts throughout the year either when they find the right gift (33%) or when they go on sale (27%). About 7% of respondents say they complete the bulk of their shopping before Thanksgiving.iv
Simplify family presents. Got a huge clan? Buying gifts for your extended family can add up quickly. Suggest a gift exchange in which all the adults draw names and buy for just one person. Or maybe it’s time to skip gifts for adults and focus only on the kids. You can also suggest setting a spending limit, so people don’t get overwhelmed. Think about what kind of strategy might work best for your crew.
Consider investment gifts. If gifts have gotten out of hand for the younger people in your life, consider giving them the gift of investing by starting a mutual fund account in their name or a Coverdell Educational Savings account.