4 Tips to Manage Money During the Holiday Season Effectively
We are officially into the holiday season. The ever-rising inflation might be eroding the value of our money. It doesn’t mean we can’t have a good time over the holidays, right? In the spirit of holiday giving, here are a few tips on how to manage money during the holiday season like a pro.
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How to Manage Money During the Holiday Season
Despite the pressure of the holiday season, it is quite possible to enjoy the holiday season within your financial means. So, here are 4 Tips to manage money during the holiday season like a pro.
December Salary Should Get You Through January
Because we are a few days into getting our December salaries, I know that some of us are already doing the math; buying presents, traveling, sherehe with friends and family, and small-small entertainment at the local centre.
Here’s the thing, though. November salary caters to your December expenses. So your December pay should last you way into the end of January. We all know how long that month can be. It almost feels like living a whole year, especially when you are strapped for cash.
If you have been saving for holiday spending, you are in a better position to ensure your December salary doesn’t deplete funding your holiday expenses. Assume that salary credit doesn’t even exist. Feeling like you are not disciplined enough to ignore that balance? You could send it to a savings account. You can even fix it for a month and withdraw in January.
Of course, an early withdrawal will cost you any accrued interest. But considering how little that interest usually is for a short period, it’s a better strategy than leaving the funds in the account and facing temptations to spend it. That holiday savings kitty is what you should use to fund gifts, travel, entertainment, and other holiday expenses.
What happens if you have not been saving for holiday expenses? This is where things get a bit rough. But it’s doable. Since your November salary has funded December expenses, like rent, utility bills, and household shopping, the primary headache is the extra holiday expenses. Here’s what you can do;
1. Make a financial plan for January
If you have a budget, perfect! You already know where your money goes. If not, it’s time to review the previous months’ expenses and see your spending habits. The goal is to have a guidance system for January’s most important bills and expenses. You can either save money for these or pay in advance, as long as you don’t use the money for holiday expenses. The major bills and expenses will include rent, utility payments, back-to-school costs, transport, and food expenses for January.
Start saving for the next holiday expenses with this challenge
2. Have a holiday budget
You have saved your December salary or paid the necessary January bills; what next? Now, you can use your holiday kitty or the remainder of your salary to fund holiday expenses. But first, you must have a holiday budget.
It gives you a spending plan for this period, allowing you to avoid impulse buying and overspending. Don’t have a budget yet? Then, it’s time to make one.
- Make a list of needed groceries and foodstuff for holiday meals. With this, you can scout for discounts and bulk purchases in advance to save money.
- Make your gift list – who are you buying gifts for, what will you be buying, and what’s the estimated cost for each item? Going gift shopping blindly is a recipe for impulse buying and a quick way to drain your bank account.
- Have plans for enjoyment – there is no holiday season without some entertainment, right? Many people take advantage of this period to relax, unwind, and visit eateries and other pints for fun. Still, it needs proper financial planning lest you run out of money and start accumulating unplanned debts. So, what would you love to do for fun during this period? How much might it cost you? Can you afford it? If not, are there any holiday expenses you can cut? Or, can you settle for a more affordable entertainment plan?
- Budget for the black tax, especially if family members count on you to fund their holiday enjoyment escapades. Of course, sharing this time with your family is more than okay. But don’t let the burden of the black tax or financial and emotional blackmail from family drive you into a financial crisis. Having a plan and a budget for these will help you cater to their needs but within your means.
Yes, you can deviate from your budget. But if you do, ensure it’s within your financial ability. Avoid getting into debt, as it affects your financial plans for the year/s.
Still looking for gift ideas? Here are some inspirations
Protect Your Private and Financial Information
With all the holiday spending, you can imagine the number of financial transactions. That means scammers and fraudsters are on the prowl looking to have a field day getting money out of you. You must be as vigilant as ever during this season, and here’s how you can do it;
- Avoid carrying loads of cash
- Do not use public Wi-Fi to access your financial information – that means no logging into your bank apps or mobile money apps.
- Think twice before clicking on emails – fraudsters use email phishing, masking their trail with company or individual names and emails that look legit. However, if you look carefully, the said name or email will have a mistake, like a spelling error and inconsistent company names, addresses, and domain names.
- Set transaction limits – your bank most likely allows you to set transaction limits. For example, my bank allows me to set limits for different transaction methods, like mobile payments, RTGS, EFT, and card transactions. You can always reset the limit when you want to make a transaction.
- Monitor your accounts closely to help detect any fraudulent actions in advance
Hopefully, you get to enjoy this holiday season, regardless of your financial situation. Remember that a holiday budget will help you plan your festivities and manage your money without the constant worry of getting into debt. Happy Holidays!
How do I create a realistic holiday budget that covers everything?
Creating a holiday budget starts with listing all anticipated expenses, including gifts, decorations, food, and travel. Allocate a specific amount to each category based on your overall budget. Be realistic and prioritize essentials.
What strategies can I use to stick to my holiday budget?
Consider using cash for purchases, setting spending limits per person, or using apps to track expenses. Avoid last-minute shopping and take advantage of sales throughout the year to spread out costs.
I’m bad at budgeting. How can I stick to my holiday plan?
Use cash envelopes for different categories like gifts, food, and entertainment. Track your spending regularly and adjust your plan if needed. Utilize budgeting apps to automate the process and monitor your progress.
Should I use credit cards for holiday shopping?
Using credit cards can be convenient, but be cautious. If you do, try to pay off the balance in full to avoid high interest charges. Consider using cash or debit cards if it helps you stay within budget.
Is regifting an acceptable way to save money during the holidays?
Regifting can be a thoughtful and economical choice if done tastefully. Ensure the item is in excellent condition, suitable for the recipient, and avoid regifting within the same social circle.
How can I handle the financial pressure to overspend during the holidays?
Set clear boundaries and communicate openly with friends and family about budget constraints. Focus on meaningful experiences rather than material gifts, and consider alternatives like organizing a gift exchange or setting spending limits for group activities.
Should I start planning for the new year’s finances during the holidays?
Absolutely. Use the holiday season as a stepping stone to plan for the upcoming year. Set financial goals, create a budget for January, and consider strategies like automating savings or investments to kickstart the new year on a financially positive note.