Have you started counting down the shopping days remaining this holiday season? Despite inflation, consumer spending rose by more than 7% during the 2022 holidays. But that’s all the more reason to keep a tight rein on your finances and start the New Year off right. Here are some financial planning tips for a happy holiday season.

Set a Budget

You’ll likely exceed your usual monthly budget around the end of the year. But that doesn’t mean you should spend beyond your means. Instead, set a clear limit for gifts and end-of-year celebrations.

It’s important to start budgeting for the holidays ahead of time, allocating some of your discretionary income over the months leading up to the end of the year.

Watch Those Credit Cards

It’s tempting to pull out your credit card for major holiday purchases. But beware; the holidays make it far too easy to rack up credit card debt. When you must use your credit card, keep careful track of your spending and pay off your balance before the due date.

Also, be cautious about saving your credit card on popular e-commerce sites. Storing your credit card data makes it easier to come back and spend more money later on, which can lead to impulse spending that derails your monthly budget.

Look for Deals

One of the positive sides of the holiday shopping season is that retailers are competing for your business. Consumers can often find great deals on major items, so it pays to shop around before making a final purchasing decision.

Black Friday is practically a holiday unto itself, as is Cyber Monday. But most retailers offer promotional specials as early as several days before Thanksgiving, as well as promotions that run throughout the holiday season.

Get Creative With Gifts

Some of the best gifts don’t come from a store or online retailer. Consider giving experiences, such as volunteering during the winter months or even planning an affordable family vacation.

Bonus tip: Skip the big box chains entirely and purchase locally made products from small businesses in your community. While this might not save you money, anything you spend will go back into your local economy.

Plan Ahead for Next Year

Once January rolls around, it’s time to pay off any debts you accumulated over the holidays. It’s also time to think about next year. If you struggle to fit holiday shopping into your budget, you may want to set aside a portion of your disposable income every month for holiday shopping. 

The earlier you start saving, the better equipped you’ll be to cover all of your holiday costs without going into debt. You can rest easy in December, knowing you can celebrate with your loved ones without feeling the pain in January.

Having a Happy Holiday

The holidays are a season of love and charity, but that doesn’t mean you can let your guard down when it comes to spending. By following these tips, you can stay in control of your budget, all while having a happy holiday.

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