Unexpected Ways Holidays Break Your Budget

by BFine.org Administrator

family enjoying holiday

Let’s face it, the holiday season is expensive. Even if you save all year and shop the sales; there are unexpected ways that the holiday season leads to exceeding your budget. With a little advance planning and realistic expectations, you can get through the next few months without spending more than you had planned.

Start with a holiday budget. BFine.org suggests that you take a realistic assessment of your finances and strategically plan your holiday purchases. List gifts, holiday food, activities, travel expenses and whatever else that exceeds your normal monthly expenditures.  You should prioritize each expense and probably look for expenses that can be cut. 

Shopping Hype Days– Retailers have developed successful marketing campaigns around encouraging you to spend money. There’s Black Friday, Cyber Monday, Giving-Tuesday and now there are pre-Thanksgiving early Black Friday sales.  Shoppers are constantly targeted with ads about the “deals” and it’s easy to get caught up in the shopping hype.

Use your holiday budget to make a targeted list of what you want to buy and compare prices for only those specific items. Even better, avoid these hyped-up days and spend time with your family or friends going to a park, museum, playing tag-football or just savoring the day together.

Convenience Costs – Everyone is busy, especially during the holidays. From the grocery store to gifts and holiday activities, convenience comes at a high price.

In the grocery store the pre-cut vegetables, box mixes and fancy cuts of meat can double the price of a meal.  While you may not have the skills of a trained chef, spending time combining ingredients from your pantry or enlisting your family to help with the meal preparation can keep you on budget while creating memories.

When shopping for presents, it’s easy to be distracted by the bundled gift sets. You may have set out to buy an electronic device, but the bonus gift set with the rapid charger and travel case is convenient and seems like a good deal. Usually, the bundled gifts come at a higher price that is higher than what each of the items would be separately. The increased price of 10-20% of what you had budgeted can really cost you in the long run.

Warehouse stores are notorious for enticing you to buy more than you need. Yes, you may need cinnamon for the holiday meals, but the recipe calls for two sticks not 200 sticks of cinnamon. Some people will use creative math to justify the purchase by pointing out the price per unit and long shelf life, but it still costs more than buying what you need now. Cinnamon should not be amortized over 5 years.

Payment Pitfalls – We live in a pay with plastic society. Some stores and restaurants don’t even accept cash any longer.  Its very easy to overspend because you don’t physically see that your money is running out.

For those who are truly serious about staying within their holiday budget, try using a reloadable gift card or secured credit card instead of a credit card. They are easily available at most grocery stores or banks.  This way when you are out of money on the card, you are out of money available to spend.  This is a great way to teach young gift buyers how to budget for the holiday as well.

If you are using a credit card for your holiday purchases, not paying off the balance at the end of the month can cost you extra. The average Annual Percentage Rate (APR) for October 2023 was 24%. That means that an item purchased for $100 with a credit card and not paid off at the end of the billing cycle, now cost $124. If you don’t pay it off the following month, the amount continues to grow. Paying the minimum payment will often only pay the interest on the item and not the actual item. This is one of the easiest ways to make your efforts to budget and savvy shop implode.

The best advice for keeping within your holiday budget would be to give from the heart. Giving your time or a handmade item such as a scarf, baked goods or a night looking at holiday lights can leave a lasting impression on someone’s heart. Afterall, the holidays are about love and treasuring those who mean the most to you.

Happy Holidays from BFine.org.

A public education project of the National Association of Chapter Thirteen Trustees

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