Avoid A Financial Hangover This Holiday Season

Avoid Financial Hangover

As the largest gift giving holiday season, the final month of the calendar year accounts for nearly 30% of the entire annual sales for some retailers. Though great for suppliers, it is the costliest season of the year for consumers. This is usually the time you hear yourself saying “.. But Wait a minute! Where all my money really went?” You just cannot seem to recall what you spent all those missing zeros in your bank account on.

The month of January for many is comparable to waking up with a hangover. You had a ball “ballin” out at Christmas but now, the negative effects of your spending spree begin to set in; higher than expected credit card statements, tighter finances than imagined, increased stress and regret over the amount of money spent. This pandemic isn’t an excuse for reckless spending.

Here are some ways to avoid a financial holiday hangover this season.

1. Set up your holiday budget early

Most of us don’t even think about the Christmas spending that we’ll do during the course of the year. Only when December rolls around it becomes a thought. Then, we quickly realize that we haven’t saved enough to buy the gifts that we wanted to give. Add a “Christmas gifts” line item to your budget, and save for it in small increments, all year long!

2. Shop around

When you’re looking for that perfect gift, make sure that you do your research. Try to find the best deal on whatever you’re buying. If you’re an online shopper, search websites like rakuten.com, retailmenot.com techbargains.com and others to find the best deals, and money saving coupons for when you do buy.

3. Avoid impulse purchases

Part of shopping around is avoiding impulsive purchases. How do you know you’re getting the best deal if you purchase on the spot? I know you think it will be sold out by the time you return, or the salesgirl said it’s the last one they have in stock but ho ho hold up! Stick to your plan. Ask yourself, is this even in my budget? Go home, sleep on it and if you still want the item and it’s in the budget, then purchase.

4. Avoid debt

Do not take a loan or use credit you cannot repay immediately on your credit card to purchase gifts! Big no no. Unlike buying a house, starting a business or even university tuition, this is not a good reason to acquire debt whatsoever. Purchase what you can afford, it’s the thought that really counts.

5. Potluck style

If your house is “that” house where all the family gathers every holiday and you’re expected to feed everyone too, this year switch it up. Let guests know that you’re doing a potluck style gathering this year and everyone must bring a dish. Repeat after me, ‘If I provide the venue then they provide the menu.’ Hosting already has expenses attached to it aside from food. Make sure to assign specific dishes to each person so that all the holiday favorites are on the table and nothing’s missing.

6. Limit self-gifting

Recently the ‘self-gifting’ holiday trend has been on an increase. When out shopping for others, people are now treating themselves to presents.  According to the National Retail Federation, nearly 60% of people are now self-gifting. Persons spend, on average, $1,000 TT buying gifts for themselves. Try to limit yourself in this regard.

7. Cash in on your skill

Cut down on the cost of gifts by using your skills. Instead of spending $200 on a gift for someone, be creative and find a way to give them a nice $50 gift instead. What are you good at? Baking, cooking maybe photography? Offer a free professional photoshoot or bake them a batch of Christmas themed cookies. Whatever you do, presentation is everything!

8. Establish expectations early on

If you determine that you’re going to cut down on the number of Christmas gifts you will be giving this holiday season, it is important to establish those expectations early on. Take the time to inform your kids so they can manage their expectations. For example, maybe establish a three (3) gift rule: one thing they want, one thing they need, and one experience to share with the family. Or the four (4) gift rule: something they want, something they need, something to wear and something to read. Every family is different, do what works for yours and your budget.

9. Look for shortcuts & deals to make travel cheaper

One of the largest costs of the holiday season for some families is travel. Though there will always be expenses incurred whilst traveling, you can still look for ways to reduce them: shop around airlines and travel dates, avoid baggage fees by packing light, pack meals for on-the-go, and do your research on hotel costs. Sites like trivago.com and expedia.com can help you conveniently compare hotel cost.

10. Track spending

One vital element to staying on budget is to track your spending on a daily basis. This is absolutely essential to avoid overspending during the holiday season. Due to the additional shopping, the importance of tracking your spending during the month of December cannot be overemphasized. It doesn’t even have to be fancy, you don’t need an app, a simple piece of paper and pen at the very least. At the end of each day, just record the items you spent money and compare it regularly with the budget you created to stay on track. Avoiding overspending during the holiday season can be challenging, it requires extra intentionality. But trust me, January will thank you for it.

11. For large or extended families, draw names from a hat

To cut down on expenses for extended or just large families, draw names from a hat. That way you only have to buy a gift for one member of the extended family, instead of 10-20. If you want to step it up a notch, set a dollar limit in order to make sure no one spends too much.

12. Cut down on convenience costs.

This year, how about you make your own pastelle for a change? Some of the highest hidden costs of the holiday season are “convenience” expenses. The holiday season throws us out of our usual family rhythms with additional activities and responsibilities. Thus, resulting in the price we are willing to pay for convenience to rise. Sometimes, it is just easier to order four (4) dozen pastelles and three (3) fruit cakes than to make them yourself. But if your budget doesn’t have the wiggle room and with the average cost of a single pastelle being fifteen $15, you may want to put on your apron. Yes, it is going to be more work. Maybe make a ‘lime’ out of it. Invite 1 or 2 friends to help you.

In addition, all the time spent shopping leads to other unnecessary purchases while at the mall: coffee drinks at Rituals/Starbucks, treats from Cinnabon’s etc. Pack a small snack if you know you’re likely to get hungry while out shopping. These expenses appear minor. But over the course of a month, all of these add up quickly.

In case you’re a recovering “spendaholic” and this holiday season doesn’t go as planned financially, take a look at these six (6) quick tips to bounce back from a Financial Hangover.

  • Don’t dwell on the past
  • Give up spending on one category for one month (eating out)
  • Be smart and mindful about spending moving forward
  • This is the perfect time to start budgeting
  • Focus on side hustling to replenish your funds
  • In the future plan ahead