The holiday season should be the most wonderful time of the year, but it can often lead to overspending and post-holiday debt. What experts call a “financial holiday hangover.” According to an Experian survey, 63% of consumers overspend during the holidays, and nearly 90% feel tempted to do so. After all, who doesn’t want to buy that pricey new toy, game, or gadget your child has been begging for just so you can see the look of joy on their face when they open the gift.

Below are several proactive strategies you can take to avoid overspending as we enter the gift-giving season.

Set a realistic budget early. Determine how much you can afford to spend, including all related expenses like gifts, food, travel, wrapping paper, etc. The earlier you plan, the easier it is to save and stay disciplined. If buying that new gadget for your child is important to you, then be sure to include it in your plan.

Make a detailed list. Identify everyone you plan to buy for and assign spending limits. You can then review and adjust your list to stay within budget as you shop. Maybe you found a great bargain on the perfect gift for your Aunt Susan and was able to save $20, you can then allocate that $20 towards other gifts to give yourself a bit more flexibility.

Consider alternative gifts. Giving doesn’t always have to be in the form of a material item and often a gift of time or something handmade can be even more meaningful. You could also partner with another relative to purchase a larger item that your loved one will adore while still keeping within your allotted spend limit for that individual.

Start saving as early as possible. Setting up a dedicated savings fund, cutting back on small daily expenses, and using automatic transfers can be a helpful way to save small amounts that can turn into your larger set holiday budget. You can even maximize credit card rewards or cash-back offers strategically, just be cautious of impulse buys driven by social media ads or buying something you don’t really need just to get an incentive.

Use personal loans wisely. If needed, the holidays can be the perfect time to consolidate debt which can reduce financial strain and simplify payments. Talk to your qualified wealth advisor to see if this could be something that could benefit you and examine repayment terms to ensure they are affordable and fully understood.

Ultimately, thoughtful planning and disciplined budgeting can help you enjoy the holidays without starting the new year in debt. Read more about this topic at this insightful article from Kiplinger here.

Have questions about how these insights and ideas could impact your personalized wealth management strategy? Let’s talk.

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