The COVID-19 pandemic has caused financial stress for many and reshaped the way most people save and spend money. Before you let your holiday joy lead to New Year’s debt, take some time to plan your spending. This not only allows you to save money, but it can also help get you into the Christmas spirit, without the financial stress.

1. Set a Budget and stick to it

First, decide how much you can spend. Create a full holiday budget, and include any cost you anticipate outside your normal spending like gifts, travel, pet boarding, more lavish groceries, and decorations. Laying out a budget in advance can show you what you can afford and can help guide your choices. Figure out all the things you’ll need to purchase gifts, food, decorations and set a budget and stick to it. Be sure to think about little things that are easy to forget about such as charitable contributions, gas for travel and wine for a holiday party host. By setting a budget you will surely save money during the holidays. 

2. Start Shopping Early

The earlier you start shopping for the holidays, the easier it will be to resist overspending. And starting early allows you time to find the perfect gift for everyone on your list, instead of having to shop at the last minute. And this makes it more likely you’ll blow the budget and won’t save money during the holidays.

3. Pay Cash

One way to avoid holiday debt is to pay cash for everything. Once your holiday budget is finalized, take that amount of money out of the bank and stick to your spending plan. Once that money is gone, you’re done shopping. If you’re not able to pay your card balances in full each month, leave your credit cards at home. Bring the amount of cash you intend to spend, and then choose items accordingly. When you take away the temptation to spend more than what’s in your bank account, you’ll be forced to stay within your means.

4. Set boundaries around Gift Giving

Rather than exchanging multiple gifts with everyone in the entire clan, consider an alternative like Secret Santa where every family member has one person to buy a gift for at a set spending limit. Another idea is to plan to gift only the grandkids, or kids 18 and under. Or, chip in on one big ticket gift everyone can enjoy. You can also decide to pull funds together for a family experience, or opt to forgo gifting entirely and focus on togetherness. 

5. Host Potluck Parties

If you’re usually the hostess with the mostess, having all your friends over for food and drinks can get pretty pricey pretty quickly but that doesn’t mean you can’t still channel your inner Monica Gellar this year. Instead of supplying all the food and drinks on your own dime, make your party a potluck and invite your friends to bring appetizers, desserts, and drinks to share. You’ll get a great selection of goodies without footing the bill on your own.

6. Cut Back on Extras

To ease the strain on your budget, try cutting back on extras for a month. If you give up that $5 latte you have each morning for 30 days, you can save $150 which could go toward Christmas gifts. And if you do splurge on yourself in the days leading up to Christmas, make sure it’s worth the price.

7. Provide Personalized Gifts

A small, thoughtful gift is worth more than an expensive gift that someone may never use. Avoid impulses to shop at trendy stores and start the holiday by taking a moment to think about what those on your list could really use. For example, if your sister loves to bake but can’t get the hang of homemade pie crusts, you could buy her a simple pastry-making tool for less than $10 and include a copy of a fool-proof recipe.

8. Reduce, Reuse, and Re-gift

Aside from last year’s fruit cake from Aunt Lois, there are ways to be generous (and careful) about re-gifting those well-intentioned, but unused or unwanted, items in storage. Family heirlooms, new or gently-used books, jewelry, clothing, kitchen gadgets, and electronics are all good options for regifting.

9. Think DIY Gifts

Never overlook the value of DIY gifts; they definitely save money during the holidays. If you have a gardener on your gift list, try making them a terrarium. And put together a photo collage, build a plant stand or create an indoor hopscotch mat for a child.

10. Embrace Free Activities

The holidays are a time of parties, gift exchanges, and happy hours, which are all money-sucking activities on their own. To offset some of that inherent spending, switch out some of your usual activities like going to the movies or having brunch every Sunday for things that are more affordable. Try taking a walk around your local park for date night, touring the Christmas light displays in your area, or watching your favorite festive film at home.

11. Visit Discount Stores

When it comes time to wrap the gifts and stuff stockings, make a trip to the discount store. Dollar stores are a great place to load up on holiday wrapping supplies and tape. And they’re also a good place for stocking stuffers such as candy, ornaments and little toys. Spread some holiday cheer with these DIY gift wrap ideas ribbon you can make in your shop, ingenious wrapping paper storage tricks, and more.

12. Embrace the joy of giving No Gifts

More and more families are choosing to simply not exchange gifts at all. Reasons range from the desire to defy a consumerist culture, refocus on the religious aspect of the season, or do no harm to the environment. No matter what, spending less money on things, and more time with each other also makes a lot of financial sense. Take a moment to focus on the true spirit of the holidays and reflect on what that means to you. Whether it’s reaffirming your faith, reconnecting with loved ones, giving back to your community, or something else entirely, gaining some perspective on what and why you’re celebrating can provide the comfort and strength you need to stick to your financial goals.

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