It’s the year end holiday season once again! Time for celebrations and gifting friends and family. Before the joy of giving turns into a financially stressful situation for you, why not invest a little time to plan your spending? Having that clarity will allow you to make wise choices without overspending.
Here are 9 tips to help you spend wisely:
- Create a gift giving and spending plan in advance Set a budget for your overall holiday spending. Then set a budget for each person on the list (i.e. dollar amount, the ideal gift and alternatives, the likely places to purchase this gift). Yes, I know sometimes we may veer off from the budget. A small buffer would not hurt but just be mindful to keep it as close to the intended budget as possible.
- Keep track of your holiday expenses The tried and tested savings technique – noting down the numbers to keep track of spending – is not exactly exciting but it works. You will be more aware of which expenses are ‘must have’ versus those which are ‘good to have,’ to help you keep your expenses in check.
- Spend cash and avoid using credit cards This is the most important part of your spending plan. Credit cards come in handy as there is no need to handle cash and you can maximise the many perks and benefits they offer. However, charging purchases to credit cards tends to promote haphazard and impulse buying. Credit card users often say they had no idea how much they spent during the holidays until the credit card bill arrives in January or February of the new year. Cash, on the other hand, is straightforward but cash doesn’t usually offer any privileges or promotional discounts. If you have a solid budget and are adhering to it, then credit card may make sense.
- Use reward points, credit card incentives to maximise savings and start looking for bargains early Do your research and see what each credit card has to offer. Utilise your reward points to redeem goods and services. Keep a look out for holiday sales – watch for advertising and sale flyers for items you intend to purchase. Ask retailers when the items you are interested in buying are coming on sale.
- Do a ‘white elephant’ gift exchange instead Each one of us would probably own a couple of things in the house that are ‘white elephants’ – from clothes, appliances, decorative items to gifts that others have given us in the past. This ‘white elephant’ exchange is something we do in our family every year. To make it more exciting, we even created some silly rules around it! This game never fail to get us laughing and learning more about one another.
- Consider gifts that don’t cost a lot of out-of-pocket money I love potlucks! Instead of giving gifts to friends, arrange a potluck meal or high tea. You will be surprised at how many people will appreciate this money savings idea and the time spent together with people they care about. Giving away your time is perhaps more valuable than any other gift. Giving a gift card that states ‘Emergency baby sitting service available’ to a young family or ‘Free cat or dog sitting service while you are away’ to a good friend would be most appreciated. I came across this ‘Pull Names Out of A Hat’ game which I thought was a wonderful idea. If you have a big family or need to get presents for colleagues, buying for everyone can be costly. Instead of draining your bank account, you can ‘pull names out of a hat’ every year so everyone buys for one person or a few people based on an agreed budget. This way you can focus on fewer people and take the time to select something they will really like.
- Buy a gift for the whole family I am a big fan of this money and time saving idea. Think in terms of kitchen appliances, games, gadgets and electronics that a whole family or a couple could use.
- Give a gift made by you I personally like to give homemade gifts. A freshly baked loaf of bread, cookies, desserts, etc. are always appreciated. If you are skillful at something, why not use your talent to create unique and personalised gifts? These may be less expensive but can be just as meaningful as store-bought items.
- Forgo the gifting and donate to a worthy cause Tis’ the season to remember the less fortunate. Instead of buying gifts, why not channel the money to get canned food, rice, beverages and other daily necessities for the less fortunate? Charitable organisations and groups like the Boys’ Brigade are running charity drives and various programs at this time of the year to garner donations.
This is an opportune time to set guidelines for yourself to establish good spending habits. This discipline can serve you well by helping you stay on track, spend less and getting more bang for the buck.
Happy Holidays! Happy Giving!