Finance: Four tips for holiday shopping without breaking your budget

Finance: Four tips for holiday shopping without breaking your budget
Vaughn

As the holidays approach, the excitement that accompanies this joyful season can lead to spur-of-the-moment purchases that can strain even the most stringent of budgets.

It’s true that much like the process of navigating financial pressures throughout the year, effective holiday budgeting depends on careful planning and a bit of self-discipline.

According to a recent Impulse Shopping survey, more than 50% of adults in the U.S. reported making at least one impulsive holiday gift purchase last year — effectively spending more than they’d originally intended on their shopping lists.

No need to panic. With some strategic foresight and a bit of creative thinking, it is possible to keep both your wallet and peace of mind intact. So here are a few practical budgeting tips to help you navigate the holiday season:

  1. Avoid buying gifts with credit cards

Whenever possible, pay for presents with cash or a debit card to easily keep track of your spending and to avoid running up debt when using high-interest credit cards. It’s tempting during the giving season to overdo it on gifts for loved ones. When you compound excessive buying with the dangers of a high-interest credit card, the resulting, and often compounding, debt can be difficult to pay off.

A great idea to help you save and to avoid using credit cards is to begin accumulating the funds for holiday shopping early by opening a holiday savings account just after the new year begins. Ascend has a Christmas Club account that is a convenient way to make saving easier for next year’s shopping list — or any other large purchases. The funds that are built up can be accessed at any time of the year without penalty.

2. Create a realistic budget and stick to it

Before you make a shopping list, get in the car, or hop online to begin shopping, establish a clear budget that will comfortably align with your total spending limit. Start by taking an honest look at your current financial state by reviewing your income, expenditures, savings, and any funds set aside specifically for the holidays.

Free budget worksheets and interactive lessons can be found at ascend.org, where you can also schedule an appointment for a free Financial Health Checkup with a certified financial counselor.

3. Plan shopping ahead of the rush

If possible, instead of waiting until the last minute to do your shopping, take advantage of the many sales that are scattered throughout the year. This strategy can spread your spending across 12 months, making annual holiday shopping less painful for your wallet. It’s also often less stressful to have your shopping done earlier. Let others “enjoy” the last-minute hustle and bustle of the season while you’re relaxing with a glass of eggnog.

4. Get creative

Who says that a memorable holiday gift needs to be bought? Here are some alternative ways to show love and appreciation to friends and family without stretching your wallet:

  • Organize a gift exchange among family. This approach allows everyone to concentrate on purchasing one thoughtful gift rather than the expectation that all family members must spread their budgets thin with the purchase of multiple presents. You can even set a dollar amount and know exactly how much you’re spending.
  • Consider planning activities such as family outings or game nights that drive personal connection without significant financial investment. Spending time together is the true gift of the holiday season, after all.
  • Get crafty. Handmade gifts can be both meaningful and budget friendly. Whether it’s baked goods, personalized crafts, or thoughtful services like babysitting or home repairs, DIY gifts often carry more sentimental value than store-bought items.

Make sure you’re focused on the most important things this holiday season, like quality time with loved ones and finding joy in every day. Following a few smart and simple budgeting guidelines can help keep your celebrations more stress- and debt-free.

Tamika Vaughn is the Branch Manager for Ascend Federal Credit Union locations in Cool Springs and Green Hills.

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