7 Tips for Stress-Free Holiday Spending
The holiday season is a time for celebration, connection, and giving. But it can also be a period when expenses quickly add up. From gifts to decorations to travel, it’s easy to spend more than you intended and find yourself facing financial stress after the season ends. The good news is that with some careful planning and smart strategies, you can enjoy the holidays without overspending.
1) Make a Budget and Stick to It
The first step to stress-free holiday spending is creating a clear budget. Include everything from gifts and holiday meals to travel and entertainment. Allocate funds in your budget by category so you can see exactly how much you have to spend in each area.
A great method for budgeting is the 50/30/20 method. With this approach, you break your paycheck down into manageable chunks that still leave room for the things you enjoy. It goes like this:
- 50% of your paycheck goes to necessities like rent, utilities, and important medications.
- 30% of your paycheck goes to fun things, like holiday gifts and festive activities
- 20% of your paycheck goes to savings. During the holiday season, you may put a pause on growing your savings to allocate more funds for gifts or experiences. That’s okay! You can get back at it next month.
Using tools like Canopy Online Banking or the Mobile App can help you track expenses in real time. Setting limits and monitoring spending as you go prevents overspending and keeps your finances in check.
2) Spend Strategically and Shop Sales
Shopping early and being strategic about purchases is one of the simplest ways to save. Compare prices online, look for promotions, and take advantage of cash-back or rewards programs whenever possible. Planning ahead helps you avoid last-minute spending, which is often more expensive.
Holiday stress can lead to impulse purchases, so making your shopping experience as enjoyable as possible is a great idea. A great way to address this is by making holiday shopping a positive memory, not just a chore. Make your errands more fun by sharing them with friends or family! Combining shopping trips with fun experiences like ice skating, matinee movies, or scenic strolls in the park are other great ways to fill your shopping trip with holiday cheer and check off every name on your “nice” list.
3) Give Thoughtful, Not Expensive, Gifts
The holidays are about showing care and appreciation, not spending the most money. Thoughtful gifts can be simple or homemade, or even include experiences like a shared outing or event. Charitable donations made in someone’s name can also be a meaningful way to celebrate the season without overspending.
For ideas and guidance, Canopy Financial Coaching can help you find creative ways to give gifts that are meaningful while staying on budget.
4) Track Spending
Keeping a running total of all holiday expenses can prevent surprises and help you make quick adjustments if needed. A simple spreadsheet or budgeting app can track purchases, travel costs, and other holiday spending. Even popping into mobile banking every morning to check your balances is a great way to stay on top of your finances.
If you have a rewards card that gives you cash back for making a certain number of purchases, like Canopy’s Kasasa cards, this is a great way to make sure you’re hitting the minimum purchases to optimize your rewards this season.
5) Avoid High-Interest Debt
It can be tempting to rely on credit cards to fund the holiday season, but high-interest debt can create stress that lasts well beyond the holidays. To minimize buyer’s remorse and post-holiday stress, set your spending ahead of time. Allocate those funds into tangible assets - like cash - and place them in individual envelopes.
You can make an envelope for every family member or friend you want to get gifts for this season! That way, when you go shopping, you have a set amount to spend on gifts that you literally can’t accidentally “overdraft.” Any leftover funds can go to savings, or if you end up using your credit card, pay off balances completely or quickly to avoid paying more in interest on your purchases.
If you end up using a credit card during the holidays, that’s totally fine! Just keep your total spending under 30% of your credit card’s limit and pay off your entire balance by the payment date to minimize accrued interest.
If you need guidance managing holiday expenses or high-interest debt, reaching out to Canopy Credit Union early is the best step you can take! We have free financial coaching for everyone in the Spokane community.
Wherever you are in your financial journey, we can make a game plan that sets you up to reach your financial goals. Give us a call at 509.328.2900 to get started.
6) Take Advantage of Rewards and Offers
Many retailers and banks provide rewards, cash-back programs, and seasonal promotions. Sales are super common during the holidays, and you can land some pretty stellar deals if you keep an eye on your favorite stores. Online shopping is a great way to stay on top of bargains and sales. Take advantage of these offers, but only for items you already planned to purchase. Maximizing rewards without overbuying is a smart way to stretch your budget further.
Pro Tip: Create a list of gift ideas you want to get and search for deals on those specific items when shopping for gifts. That way, you won’t get caught up in the allure of a good price on an item you’re less excited about.
7) Plan for Next Year Now
There’s no such thing as saving too soon! This year’s holiday season is a great time to prepare for the next. Even setting aside a small amount each month can reduce future financial stress and allow you to focus on what matters most. Just setting aside $25 every month adds up to $300 you have on hand for next year. If you can contribute a little more, it adds up quickly! If you can contribute $100 per month, that leaves a fair lump sum for holiday fun!
Consider using a Term Share Account or an Automatic Savings Plan to begin building a holiday fund for the next season. Canopy’s Holiday Club Savings accounts are a great option for this. You earn 2.02% APY on your contributions, which means your money grows while it sits in your account. Another perk of Holiday club savings is that your savings are essentially stored in a “Piggy Bank” you can’t touch, ensuring you aren’t tempted to dip into your savings until they’re released on November 1st.
Wrap Up
Smart holiday spending is about planning, prioritizing, and making the most of the resources available to you so you can spend more time focused on what’s truly important to you. By creating a budget, tracking expenses, and making thoughtful choices, you can focus on what matters most: creating memories, celebrating with loved ones, and entering the new year with confidence.