The holiday season is right around the corner! But with inflation and rising prices, thinking about paying for gifts, decorations, parties, and travel can feel overwhelming. But there are steps you can take to combat rising prices and maximize your budget.
Step #1: Outline Your Holiday Plans
Begin by creating a general list of your holiday plans. While the holidays are a few months out, you may already know you’ll be hosting a party or traveling this winter. Try to detail as much as possible to help you get a complete picture of upcoming costs.
Then, take inventory of any items you may already have in your possession. For example, you might have leftover supplies from last year, like wrapping paper or decorations for hosting a party.
The more you can outline in this step, the better!
Step #2: Estimate Holiday Expenses
The first thing most people think about regarding the holidays is gifts. While this can be a pricey holiday expense, other things like decorations, parties, activities, and traveling add up.
It will be harder to estimate prices accurately this season because of inflation. However, one budgeting technique is categorizing your planned expenses and setting spending thresholds. Then, set spending limits for each category based on your predicted holiday budget. For example, you might organize your expenses into:
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Gifts
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Decorations & Supplies
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Food & Meals
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Travel & Accommodations
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Activities & Parties
Step #3: Rework Your Budget
In the months leading up to the holiday season, finding ways to trim your expenses is essential. Review your current budget and see if there are costs you can cut – even temporarily. Every expense has a tradeoff. For example, you could skip going to a restaurant with your family this week and use those funds for a family activity over the holidays.
Step #4: Shop Early
Shoppers can expect higher prices on just about everything this holiday season. If you already know some gifts you plan to purchase, it’s wise to start shopping now. Consider subscribing to promotional emails or texts from stores to stay on top of upcoming sales.
Also, ensure you’re familiar with any return or price-matching policies. That way, if prices drop closer to the holiday season, you can take advantage of the savings.
Step #5: Make Travel Plans Now
If you know you’ll be traveling this holiday season, begin making plans now. Lodging and airfare will always jump in price leading up to the holidays. The sooner you can book your reservations, the better. Utilize travel websites and apps to compare options, set price alerts, and review special holiday packages.
The holiday season is a joyful time to create beautiful memories with friends and family. While the economy has shoppers a bit worried, the above tips will help you maximize your budget.