This post was sponsored by Regions Bank. All opinions are my own.
The holiday season, it is quickly approaching as our year starts to come to an end.
While it may be considered a time for family, friends, and the things we are most thankful for in our lives, if you’re not careful, it can also mean a major strain on your wallet.
In fact, the holiday season is often dubbed “the most wonderful time of the year,” but for many Americans, it can be an incredibly stressful time financially. As parents, this is something we know all too well.
Overall, the National Retail Federation predicts a 3.7% increase in sales this year, with the average American set to spend an estimated $786 in the following categories:
- $459.87 on gifts for family
- $80.00 on gifts for friends
- $26.03 on colleagues
- $30.43 on other people in their lives
When it comes to buying gifts for loved ones, whether shopping online or in-store, there’s often a temptation to spend too much on gifts, leading to a huge case of buyer’s remorse come January.
Begin with the golden rule.
Spending on gifts shouldn’t exceed more than 1.5% of your annual income. Use this rule as a guide to determine how much you should set aside to spend on gifts for your family and friends – and stick to it. Remember, the holiday season is all about spending time and making memories with the people that mean the most to you, not the amount of money you spend on them.
Separate and delegate.
Consider creating a separate account to fun gift purchases and make regular contributions from your primary checking account in a weekly, bi-weekly, or monthly basis. Plan early for next year and spread those contributions out over the course of the entire year and make the cut from each paycheck a little easier to handle.
Only buy what you can truly afford.
To prevent overspending, never leave home without a list of what you intend to buy, and be sure you have the money needed to cover your purchases once you arrive in-store.
If you’re looking for a truly meaningful gift for someone special, try making them something yourself rather than spending more money. One of the things that we love to do in our family is have the kids make a few fun projects that can be kept as keepsakes.
Last year, for example, we spent a fun afternoon as a family making hand print keepsake ornaments! These are adorable, can be treasured for years to come, and cost you practically nothing at all to make! They’ll look amazing on your own tree at home, but they make even better gifts for grandparents and other family members that live far away.
Use timing to your advantage.
While things like airline tickets should be booked far in advance, other items – toys in particular – often drop in price during the first two weeks of December. Sometimes it pays to wait, other times it does not, so be sure to check for deals before you head out shopping.
As December nears and we inch closer and closer to the major shopping season, now the time to start mapping out your shopping strategy. Establish a benchmark based on your income; create a holiday savings account, and fund it regularly; be sure you’re purchasing within the parameters of what you can truly afford; and know when to buy and when to wait. And remember, the holidays are meant to warm the heart – not burn the wallet!