The theme this week on the Retirement Quick Tips Podcast is: How To Minimize Financial Stress During The Holidays

Today, I’m talking about setting a budget for the holidays. 

Because of inflation, many people will be forced to cut back this year, but many of us will struggle with this and will still have the awful hangover of credit card debt in January.

If you’re more stressed about your finances this year, or if you spend too much during the holidays, then it’s really important to have a budget for the holiday season. 

And most importantly, it is never worth it to go into credit card debt because you spent more than you could afford during the holidays. 

When many people think about budgets, they just consider gift giving and what they’re going to spend on family and friends for gifts and stop there. 

But there are so many other ways that we spend more than we might realize during the holidays. We also have to budget for any new outfits or clothes for that holiday party, eating out and travel, which we tend to do more of this time of year.

So when budgeting, it’s important to look at your calendar and activities and consider all the areas of spending beyond gift giving. 

Once you build in all the categories of spending, you’ll want to figure out how much in total you have to spend this year across all categories. 

And then you can write out all the activities, travel, names of people you want to give gifts or send cards to, and start assigning a budget to each one. Once you put pen to paper, you realize that it adds up quickly, and you may have to cut back on a few things, say no to an event or 2, or decide to wear the same outfit you did last year. 

The key with making this work without guilt is to be creative. Maybe you can host a friend at your house with some dessert and a bottle of wine, rather than going out for dinner like you normally do. 

Doing a secret santa with my husband's family has saved me hundreds of dollars over the last several years, because I just spend about $150 on 1 person, rather than buying gifts for everyone. 

And for my side of the family, my plan is to only gift to my niece and nephew - they’re both teenagers, so I will just be giving them cash, which I think they’ll appreciate more anyways. 

If you’re not ready to cut off your family and stop gift giving like me, the Grinch, then consider baking treats or sharing a recipe, give something less expensive and longer lasting, like a plant, a book, or a scrapbook, or maybe consider a Secret Santa in your own family. 

Many of us continue to give gifts to family and friends out of obligation or guilt, but most of us don’t really need or want more stuff anyways, especially if it’s causing financial strain or an indebted January to the gift giver. 

So take the time to create a budget, and scale back where necessary so you don’t overburden yourself or overspend. 

That’s it for today. Thanks for listening! My name is Ashley Micciche and this is the Retirement Quick Tips podcast.  

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Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance