Money to be spent on the holidays.

Your Holiday Budget & Inflation

This holiday season is expected to be one of the roughest in some time for many families. With rising inflation, it is more important now than ever to budget and plan your holiday finances. This article will tell you what you need to be doing right now to be prepared.

Tis The Season…For Debt

The holiday season has always been the perfect opportunity to get into debt. There is literally no ending to the possible ways to spend your hard earned money. This has always been a fact, but it is particularly true this season. With rising inflation, the costs that you can incur have never been greater. If you got through the season last year spending 1000 dollars, you could easily be spending over 1200 dollars this year.  If you want to get through the holidays unscathed, put some of the following tips into play.

Plan Your Spending

You might have been able to get away with winging it in the past, but times have changed. Record breaking inflation has dramatically increased the costs of everything we buy and that means you need to plan.

Determine a total holiday spend and then break that down into categories. For example, how much do you want to spend on food, decorations and gifts. If there is not enough to go around, you may need to make some cuts or find a way to add a little extra income in the form of a part time job or side hustle.

Communicate Your Intentions

If you plan to cut back on gift giving, be sure to communicate this with your friends and family. Chances are good that others are also watching their spending this year and an agreement to pause gift giving for a season might be a welcome idea. The last thing that you would want is to not have a gift for someone who went about shopping like normal.

If you have children, they may also need to be included in the discussion. The travel and gift giving that is normal might just not be possible this year and that may come as a shock to them. This is especially true with younger kids who are often oblivious to the way that money actually works.

Set Gift Giving Limits

If you decide to maintain your gift giving tradition, set limits. Determine a total budget for friends and then divide it accordingly. Also consider gift giving events such as white elephant parties or secret Santa exchanges. This could allow you to buy just one good gift and save money over individual gift giving.

For the kids, it might be time to simplify and get back to the true spirit of the holiday. A good concept to consider is “a want, a need, a wear, a read.” Buy them one thing they want, one thing they need, an item of clothing and a book to read. Simple down to earth gift giving that meets needs and still allows for a bit of extravagance.

Take Advantage Of Free Activities

Yes, the holiday season can be expensive but not everything comes with a price tag. You just need to know where to look for your holiday entertainment.

Finding free activities can be as easy as checking the community events page from your city. Most cities will plan events like craft fairs, movies in the park and light shows. Take full advantage and be sure to look into events happening in neighboring cities. Most city events are fully open and do not require you to be a resident, spo spread out your search as far as you are willing to drive.

Have A Dedicated Holiday Spending Account

This really serves two purposes.

First, it gives you a place where you can start saving for the holiday season. Being separate from your other savings, you can make sure that holiday funds do not get co-mingled with your emergency savings or retirement accounts.

Second, it will help you stay on budget. This account represents all of the money that you will have to spend over the holidays. Being similar to the envelope system, once it is gone, it is gone. This is a powerful weapon to keep you from over spending.

Stay Motivated

It can be easy to get discouraged in your cost savings effort. Especially considering the high cost of goods and services these days. You just need to stay motivated and determined to make your budget work. Do not let yourself break down and take out a loan or charge up credit cards. The deals are out there if you search for them and with some creativity, you can pull off a successful holiday without ruining your finances.

Posted by
James

James Car is a finance, loan and budget expert based in the United States. After attending Brookhaven college, he went on to become a successful entrepreneur. He now enjoys writing articles that help people save and make the most of their money.