3 Ways to Stop Christmas From Wrecking Your Monthly Budget

It’s beginning to look a lot like Christmas, isn’t it? From endless TV commercials to Christmas music being played in just about every public area, the holiday season is in full swing. For many people, that means spending more money than they really should. The unfortunate thing is that we forget one important point in our rush to create a perfect holiday: the true meaning of Christmas has nothing to do with money.

Help yourself and your family this year by not allowing Christmas to wreck your monthly budget. Rather than focusing so much on spending, find other ways to enjoy the holidays with your loved ones. If you put some effort and creativity into it, you’ll discover there are plenty of holiday options that don’t cost a dime. Just take the time to stop, look, and listen. While you are doing so, here are three suggestions to get you started.

1. Use Only Cash and Debit Cards

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A good place to start is committing to using only cash and debit cards to make purchases. When you use credit cards, there is a tendency to fall victim to the ‘out of sight, out of mind’ principle. In other words, you don’t stop to think about how much you are spending because you will not see the bill for another month.

When you pay with cash or debit card, there is no escaping the amount you are spending. It is coming out of your bank account unless you are using a prepaid card (more on that in a minute). As your bank balance falls, you are forced to acknowledge how much holiday spending is costing you.

Prepaid debit cards offer the same benefit but with an extra advantage: you actually have to load your cards before you can use them to make purchases. This forces you to be cognizant of how much you are spending every time you reload a card. Furthermore, you cannot load cards with the cash you don’t have. That alone makes prepaid debit cards an excellent way to regulate your spending.

If you don’t think this is all that important, think again. Experts estimate that the average American will spend more than $900 – just on gifts alone – during the 2019 holiday season. That says nothing of the money spent on parties, dining out, travel, new clothes, etc.

2. Avoid Big-Ticket Items

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You might be tempted to use the Christmas holiday season as a reason to purchase a big-ticket item you otherwise would have avoided. Maybe you see a car commercial and you start pushing out those dreams of sugar plums and replacing them with dreams of a new set of wheels. If cars aren’t your thing, maybe you are hoping to spark some romance with an overpriced piece of jewelry from the mall. Here’s what to do instead: run.

Perhaps you really do want that new car you saw on TV. But this isn’t the time of year to buy. It would be far better for your budget to plan for your next car purchase rather than buying on Christmas impulse. The same is true for any and all big-ticket items like flat-screen TVs, new cell phones, high-priced jewelry, etc.

There is nothing wrong with those big-ticket items. It just makes more financial sense to plan for them and include them in your regular monthly budget rather than making them part of Christmas spending. Planning is especially important if you don’t normally include Christmas spending in your monthly budget.

What we mean by that last statement is that sometimes people work out a monthly budget without remembering that they tend to spend more during the holidays. Let’s say your normal budget is $3,500 a month. It covers all your expenses and a little bit of savings. What if you decide to spend several thousand more on big-ticket items at Christmas?

Your budget will have to absorb your Christmas purchases in subsequent months. Because you did not plan for them, you may not have enough money in the budget to cover payments in the coming year. Not planning for big-ticket items is one of the easiest ways to bust the budget wide open.

3. Cook Your Meals from Scratch

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Gifts are not the only thing that hurts the budget this time of year. We also tend to spend too much money on food. Between catered events, going out to eat, and buying prepared foods at the grocery store, it is all too easy to blow the food budget during the busiest time of the year. The good news is that it doesn’t have to be that way. You can serve delicious food without spending a fortune if you are willing to put in the effort.

How do you do it? By committing to preparing all of your holiday meals, snacks, and desserts from scratch. Yes, cooking takes time. But you will spend a fraction of ingredients as compared to what you would otherwise pay for takeout and prepared meals. And if you are good at budgeting your food, that big turkey dinner you make for Christmas will provide enough leftovers for several more meals.

Perhaps the idea of cooking from scratch doesn’t appeal to you. Well, there is another benefit: cooking from scratch often results in healthier meals and snacks – provided you use fresh ingredients. By doing all your own cooking, you could actually improve your health and well-being. If you don’t lose a few pounds, you might at least not gain so many.

Anyone can overspend at Christmas. It is as easy to do as falling down. On the other hand, it takes a lot more discipline and creativity to pull off the kind of holiday you want without spending a small fortune. But it can be done. The three ideas presented here demonstrate as much.

Hopefully, this post has offered enough to get you started thinking about a budget-friendly holiday. Whatever you do, remember that staying on budget is the single most important thing you can do to maintain control over your finances.

About Peter Janos