And actually stick to it…
By: Josh Koehnen, MsBA, CFP
1. Set a budget and pay in cash
If you’re really looking to save this holiday season, the first thing you need to do is set a budget. Limit yourself right off the bat and commit to not spending more than you originally plan. Be sure to include holiday gifts, ride services, dinners out and hostess gifts when you’re putting together your budget. Once you set this budget, limit yourself even more by only paying in cash! People automatically spend less when they make purchases in cash. This physical exchange of cash instead of a credit card makes consumers feel much more attached to their purchase and will usually lead to spending less.
2. Spend sentimentally
This holiday season avoid getting wrapped up in the rush to buy the newest and hottest technology or toy for your family. Instead of focusing on flashy, think about what the person you’re giving to will appreciate most, years down the line. In most cases, those items will go on sale not long after the holidays! If it truly is the thought that counts, sentimental giving can mean much more to people than something off a shelf. Make a scrapbook or take them to participate in an experience with you instead of wrapping something they may forget about in a couple weeks. Focusing on sentimental spending will make your holidays more memorable, connect you to the true meaning of the season and save you some serious cash.
3. Spend less on yourself
Although you may not like it, a way to cut spending for these couple months could be by just spending less on yourself. This means fewer fancy coffees, less meals out and not self-gifting. I know it can be tempting to buy one for yourself when coming across something great during your shopping trips but avoiding this frivolous expense can pay off in the long run. If you find something you really love, write it down and go back when the sales start in January.
4. Don’t get wrapped up in sales
We’ve all experienced the flood of emails in our inbox claiming to have the best holiday sale ever. This retail marketing will try to trick you into spending more when you probably don’t need to. The purpose of the emails and sale signs is to promote spontaneous buying under the premise you’re saving money. Getting sucked into the sale campaigns can mean you’re buying things that weren’t originally on your list to begin with. If you stick to your game plan and don’t let the flashy sale emails derail you, you can more easily stick to your original budget.
5. Make lists
Channel your inner Santa Claus and make a list. By writing down everyone you want to give to, how much you want to spend on them and totaling it all up, it’ll make it difficult to overspend. The truth of the matter is you just can’t give to everyone. Listing the people you want to give to the most will be tough, but will keep you from impulse buying for that friend you haven’t seen in years. Adding the dollar amount next to the name and taking that list with you everywhere during the holidays will ensure you don’t fudge your numbers. So, make that list, check it twice and make sure you have a triumphant season while staying within budget.
Investment Advisor Representatives offering advisory services through Premier Wealth Advisors (PWA), a registered investment adviser. Securities and additional advisory services offered through Independent Financial Group, LLC (IFG), a registered broker dealer and a registered investment adviser. Member FINRA/SIPC. PWA and IFG are unaffiliated entities.