With the holidays comes, most often, a tornado of temptation to spend, spend, spend. Retailers are rolling out deals left and right and the pressure to show our loved ones our appreciation by buying them gifts can be heavy, as advertisements for Black Friday and Cyber Monday sales whirl around us.
Knowing that the spending extravaganza is on the horizon can be anxiety-inducing. According to a new LendingTree survey, 47% of Americans are dreading the holidays this year due to the costs involved. The dread isn’t unprecedented; the same survey found that 10% of Americans are still carrying debt from holiday spending in 2022. The thought of building up more debt this year is duly frightening.
But, the truth of the matter is it doesn’t have to be this way. You don’t have to live in agony over the repercussions of holiday shopping. Here are 10 ways to avoid regretting overspending this year.
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Set a Realistic Holiday-Specific Budget
In addition to your regular budget, you should carve out a realistic holiday-specific budget to keep within your spending boundaries.
“A holiday-specific budget can help you avoid overspending, so figure out how much you want to spend on things like gifts, decorations, food, travel and tips for service providers,” said Willie Arroyo, a financial advisor with Northwestern Mutual. “Use what you spent last year as a starting point and ask: Does this make sense for my budget this year?
“If you have a lower income this year or are preparing for that possibility soon, think about what you can do differently to help lower costs,” Arroyo continued. “It’s possible you may be able to find some automatic savings if, for instance, traveling is off the table, or if you usually host a big holiday dinner that will be much smaller this year.”
Choose Cash Over Cards
Oh, how easy it is to just swipe your card, whether online or in person, and feel like it’ll all just take care of itself. Alas, this is a great way to land into debt and rouse up serious regret post holidays. Aim for an all cash, in-store approach.
“Consider committing to going all-cash, at least for the holiday season,” Arroyo said. “For many people, handling physical money makes the spending feel more tangible and makes you value what you’re buying more.”
Make a Year-End Financial Checklist
As we’re bidding adieu to 2023 and getting ready to usher in 2024, now is a great time to check items off your end-of-the-year financial checklist — like setting aside money for holiday gifts, beefing up your emergency fund, or upping contributions to your retirement funds.
“If you’re fortunate to have money left over once you’ve topped off these funds, make a plan for how you’ll put that extra savings to work,” Arroyo said. “Start thinking about how you can rebound from some common financial setbacks and get back on track. If you’re unsure where to begin, consider working with a financial advisor who can provide tailored guidance for your specific financial situation.”
Make a List and Check It Twice
“Making a list of everyone you plan to give gifts to and specifying the intended gifts helps you approach holiday shopping with a clear plan,” said Maya Sudhakaran, head of growth and acquisition at Plynk. “Seeing a full list with a cost breakdown minimizes the risk of overspending and ensures that you allocate funds thoughtfully to each person on your list. Perhaps you don’t need to buy multiple gifts for certain family members, or notice a big-ticket item that could be purchased elsewhere for a better price?”
Get Creative With Gifts
Retailers lay on heavy pressure to shop ’til you drop, and it can be overwhelming. But you can cut through the marketing noise and avoid spending much by taking a DIY approach to gifting.
“You don’t have to bust your budget in order to give meaningful gifts,” Arroyo said. “Consider made-with-love gifts based on your skill sets, like baked goods, candles or knitted items. Or, if you normally spend time with extended family you aren’t seeing this year, consider sending them something the whole family can enjoy instead of individual gifts, like a gift card to their favorite retailer or a gift basket full of their favorite treats.”
Gift Experiences Instead of Things
Kendall Meade, certified financial planner at SoFi, points out that some research suggests that people experience greater and more long-lasting enjoyment from experiences rather than possessions. Lean into this approach.
“Purchasing experiences could be a way to spend less money and still convey a similar, if not more significant sentiment,” Meade said. “Especially if you do them together.”
Communicate Your Spending Plans with Your Loved Ones
Perhaps you feel obligated to go all out on gifts for your loved ones. Be open about how you feel with the recipients on your list. Set clear expectations and communicate that you would rather take a low-key approach to spending this year.
“Giving your friends and family a heads up about the type of holiday you’re planning gives them time to adjust to the idea that things may be different this year,” Arroyo said. “It’s also important to manage expectations and stick to them. Don’t keep your plans a secret.”
Tap Your Credit Card Rewards
Though it’s generally wise to stick to an all-cash plan, there is an exception to the rule: credit card rewards. Don’t let these go to waste.
“What good are credit card rewards when about a third of us never redeem them?” Arroyo said. “See if you can offset your travel, food or gift-giving costs using points earned through credit card rewards or loyalty programs. Maybe those miles you’ve been hoarding can help pay for a plane ticket to your in-laws’, or your credit card points can cover the cost of co-worker gift cards. Let your rewards take care of big or small costs so you can stress less about your budget and focus more on making memories with loved ones.”
Get Off the Internet
While it’s not realistic to log offline entirely, it is possible to pare down your screen time.
“The holidays might be a good time to get offline,” said Jacqueline (Jack) Howard, head of money wellness at Ally Bank. “Not only to be more present with friends and family, but also so you don’t feel like you’re constantly comparing your holiday to others. When we compare our experiences to others, we lose our financial values and tend to overspend when we might not be in the place to do so.”
Fulfill Your Giving Needs by Volunteering
When the temptation to spend is intense, it can be beneficial to shift your perspective on what the spirit of giving truly is. Tap into that and focus on giving back to the community.
“It is easy to get caught up in the hype that comes with the holidays, but it is important to remember what really matters,” Meade said. “Some ways you can do this is by volunteering at soup kitchens, providing gifts to those in need, or even Habitat for Humanity initiatives. It could also involve donating existing toys before the holidays. For example, my wife and I have our kids pick out and donate a bunch of toys shortly after Thanksgiving. Not only does this clear out clutter, but it helps our kids understand that others are less fortunate and they should appreciate whatever they receive.”
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This article originally appeared on GOBankingRates.com: Always Regret Spending Too Much for Holidays? 10 Ways To Avoid It