Why You Should Make a Holiday Spending Budget

The holidays are approaching quickly, which means that you’re going to start writing down gift lists and going shopping soon. Before you do that, you should go through your personal finances and calculate a sensible spending budget. Why?

Overspending During the Holidays

It’s easy to get swept up in the holiday frenzy and spend much more than you should on gifts, decorations and other extras. Soon enough, you’ll find that you’ve drained your savings account or racked up the balance on your credit card in the spirit of the season. 

This might seem like it’s worth it when you’re sipping glasses of egg nog and celebrating by the glittering Christmas tree, but will you feel the same come the New Year? Once all of the festivities die down, you’re sure to look at your finances and panic at the state that they’re in. 

What’s Wrong with That?

Overspending during the holidays can put you in a financially precarious position. By draining your savings and using up the majority of your available credit, you eliminate your two biggest financial safety nets. You’ve limited your options for dealing with emergency expenses properly. If your car breaks down or your furnace stops working, you won’t be able to afford the urgent repairs.  

If you’re ever in a position like this, don’t panic — there are still some options available to you. You could ask a trusted friend or family member for a personal loan so that you can cover the emergency expense right away. Hopefully, they have not made the same mistake of spending all of their savings on holiday presents.

Another option is to apply for a personal line of credit online. Personal Lines of Credit through CreditFresh are effective solutions for resolving emergency expenses quickly. If your application is approved, you could withdraw funds from the line of credit to pay for the urgent repairs and then manage repayments later.

Ideally, you can avoid this entire scenario by preparing for your holiday spending well ahead of time. 

How Can You Make a Holiday Budget?

The best way to avoid this entire mess is to set up a spending budget before the holidays arrive and then stick to it. Look at your personal budget to see how much you can afford to set aside for gifts and decor without disrupting your essential monthly expenses or leaving yourself vulnerable to emergencies. 

If you’re finding that your budget is too tight, here are some other things that you can do to avoid overspending:

• Commit to a gift exchange instead of buying gifts for everyone.
• Split the costs of expensive gifts with mutual friends and family members.
• Consider making homemade Christmas gifts instead of buying things from the store.
• Consider putting together DIY decorations instead of buying new ones.
• Use coupons and discount browser extensions to cut down the costs of presents.
• Make shopping lists before you browse stores in person or online. This will keep you from making unnecessary impulse purchases.

Don’t get caught up in the shopping frenzy. You can still have a wonderful holiday without getting yourself into serious financial trouble.