Many people manage their budget month by month, with roughly the same income and expenses each time. While it’s important to have a handle on your usual bills—from rent to phone service to debt payments—you also have to plan ahead for seasonal expenses. For example, it helps to save a little cash throughout the summer to cover back-to-school costs
But for most people, the most expensive time of year is the holidays. With gifts, travel, and shifting work and school schedules, December leads many people to either fall behind in their bills or rack up new debts. But it doesn’t have to be that way. Now is the perfect time to plan for holiday expenses so you can stay on track for your financial goals at the end of the year.
What Are Your Holiday Expenses?
Although most people know the holidays are an expensive time of year, it’s sometimes difficult to know just how much the festivities will cost you. It’s a good idea to make a list of all the things you usually spend money on during that time. You can even take a look at your bills or bank statements from last year to discover some expenses you may have forgotten about.
Some of the most common holiday expenses are:
• Gifts for family and friends
• Christmas tree/lights/decorations
• New Year’s outings
• Food and drink
• Childcare while school’s out
For each item on your list, estimate how much it will cost you. This way you can predict how much extra money you might need during the upcoming holiday season. While it can be daunting to look at these extra expenses now, it means you’ll be able to plan and save for them or think of creative ways to cut costs.
Make a Plan to Cover Holiday Expenses
Now that you have some idea of what kind of expenses you’ll have to cover during the holidays, you can think about ways to budget for them. Consider putting a little bit of money aside each month to help cover costs. Many people also pick up a side job around the holidays, like driving for a ridesharing service.
Another great way to make sure holiday expenses don’t derail your financial goals is to see where you can save. Look for deals on flights or gifts. Or consider setting up a Secret Santa among your friends or extended family (setting a limit on the cost of gifts helps keep things affordable). This way, you only need to buy one gift instead of many. For celebratory meals or parties, have a potluck where everyone brings a dish or drink. A little creativity can help you have a joyful holiday without blowing your budget.
Whatever their financial situation, everyone wants to enjoy the holidays. But don’t let the festivities prevent you from meeting your regular financial responsibilities, like paying off past-due debts. Take a look at your upcoming expenses and brainstorm ways to cut costs and save.
*Although we hope these tips are helpful to you, Midland Credit Management does not offer financial advice. If you have questions or concerns about your personal finances, please speak to a financial advisor.