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7 Tips for Smarter Holiday Spending

As fun as the holidays can be, they also come with a lot of costs. It’s not just buying gifts—between hosting meals, decorating your home, contributing to charities and traveling out of town, the holiday season can take a big bite out of your bank account.


If you want to survive the holidays without digging yourself into a financial hole, you need a holiday budget to keep your spending on track. Here are seven smart steps you can take to create a holiday budget and stick to it.

1. Set budgets for specific spending categories

oklahoma credit unionThe first step of budgeting is figuring out how much you can afford and what you need to spend on. Account for gifts for friends and family, meals, travel and any other costs you anticipate. Add up the expected costs and figure out whether you need to cut down on these costs to stay within budget. Perhaps you need to trim back your gift spending, or maybe you need to modify your travel plans to better suit your budget. Keep working the numbers until you're able to set a reasonable budget you'll be able to follow.

2. Track spending with a money management tool 

A money management tool can help you understand category-level trends that help you set and stick to a holiday spending budget. These tools connect with your bank accounts to give you up-to-date information about how much you're spending, and whether or not you're on pace to stick to your budget.

A money management tool even offers auto-categorization of costs, evaluating new charges to your account to determine what kind of spending they represent. This makes it easy to get a quick glance at your budgeting and spending, even when you're running around trying to keep up with the holiday rush.

3. Outlaw impulse buys

Retailers bank on impulse buys as a way to increase their sales at a busy time of year. For consumers, though, these impulse buys can be disastrous for your budget. It only takes a few spur-of-the-moment money decisions to bust your budgeting spending in a category.1

Defend yourself against this kind of activity by making a rule that you won't make any purchases without giving yourself time to think it over. If you see a great sale on an item you weren't planning to buy, leave the store and see if you're still wanting the item after a few hours—or, better yet, after a day or two. By giving yourself time, and resisting the temptation to make a quick purchase, you can avoid spending mistakes that lead to buyer’s remorse later on.

4. Give personal or homemade gifts

oklahoma credit unionDo you have a craft or skill you can share with others? If so, homemade or personal gifts can be just as meaningful and valuable to the recipients, while saving you money on gifts this year. Whether it's homemade pies, hand-knit clothing, artisan candles or another creative gift, explore ways you can use your talents to make a gift your friends and family will love.

5. Start shopping early   

Want to squeeze more mileage out of your holiday spending budget? One smart strategy is to start spending early. Start hunting for coveted gifts well before Black Friday, when you might actually score a better deal in exchange for a little extra elbow grease. Similarly, book your flights sooner than later to avoid price increases that zap your spending limits.

You should also circle Black Friday and Cyber Monday on your calendar as important dates to potentially save big on in-demand items. Don't get sucked into making impulse decisions on these sales event days, but use them to try and find the items you want at big discounts that will stretch your holiday budget and reduce how much you spend this year.

6. Use credit cards responsibly

Credit cards are a great way to earn rewards on your spending, but they can also be dangerous if you use them to spend beyond your means.
If you're worried about going into debt with your holiday spending, it might be smart to avoid credit cards and only use money that comes directly from your checking or savings account. This will save you from racking up bills that take months to pay off, and pile up interest in the process.

7. Resist the temptation to shop for yourself

It's no secret that many people like to shop for themselves during the holiday season. But if you're serious about trimming holiday spending, try cutting out gifts to yourself this season. If you're able to resist the urge to indulge yourself, you can easily cut out a category of spending that leaves room in your budget for other holiday costs.

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