Just as the leaves start to drop, so do our inhibitions about overspending. Home décor and holiday gifts often become overindulgences during this time of year. However, you can avoid financial fallout and enjoy the holiday season by keeping these four guidelines in mind.
Play the long game
When you think about holiday spending, Christmas is the most prominent culprit. Next, you’re facing Thanksgiving expenses, fall décor splurges and those visits to the apple orchard. One simple step to make smart money moves during all this fall fun is to look at the entire season of spending instead of one event at a time. For example, you can save money by making your own decorations and shopping at thrift stores for a cozy new sweater. And don’t forget that your seemingly small purchases, such as a pumpkin spiced latte or apple cider donuts, can add up. Three $5 specialty drinks a week for the next two months becomes an additional $120 you’re spending on just a few cups of coffee!
This year’s shopping season could be even longer than usual, since 77% of people say they plan to start early. Starting your holiday shopping early can save time and money if you keep an eye out for sales. However, sales can also lead you to overspend as you tack on impulse purchases over the next few months. No matter when you shop, have a plan of attack. Decide how much money you want to spend on each person, party or event. Set realistic goals for how much you want to spend. Last year, shoppers spent more than $1,000 on holiday gifts and other items. To stay on track, keep a tally of each purchase to help you course-correct if you’re overspending in one area.
Give yourself some grace
It’s always a good idea to buffer your budget. By putting some money aside for miscellaneous expenses, you’re covered in case of an emergency. The same strategy applies to holiday spending. You know you’ll be tempted to splurge on something over the next few months. By preparing for the inevitable, your budget will withstand the blow. Opening a separate account just for these splurges is a smart way to leave room for going over budget. Overspending is no joke, either. A survey found that the majority of millennials went over budget last year, and 21% of them did so by roughly $500. That’s enough to derail your budget for months to come, and no one wants to start the new year in debt.
Keep your entire household budget on track
A well-balanced budget includes a home payment you’re comfortable with. The experts at First Centennial Mortgage will make sure you’re celebrating the holidays in a home you love with a payment you can afford. Contact First Centennial Mortgage today to find loan options that fit your unique financial situation.