A few tips for millennials
Have you ever had a great financial year, only to end the year by over-spending for the holidays? The holiday season can be expensive, but with good planning and confidence, you can do a better job of setting a budget and sticking to it. Here are some top holiday budget planning tips to help you succeed this season.
Be realistic about what you can afford.
In a perfect world, you might love to give your parents a $1,000 weekend getaway and your best friend that $200 purse she's been eyeing. But unfortunately, this is not a perfect world—it's a world that comes with spending limits! As you start planning your spending this holiday season, try to be realistic about what you can afford. Don't feel guilty if you can't give everyone on your list the gifts you know they most desire. It truly is the thought that counts and anyone who truly cares for you will understand that.
Remember to include travel.
When setting a budget for the holidays, make sure you include the cost of travel. If you're flying home, account for the cost of your plane ticket and any baggage you plan to bring. Even if you're driving to spend the holidays with family, you'll need to account for gas, tolls, and restaurant meals along the way.
If, in the course of holiday budget planning, you're struggling to get your costs down, consider changing your travel plans. Maybe this is not the year to fly home. Or perhaps you could save some money by carpooling with a friend.
Start saving early.
It's a little late to start saving ahead for this year's holiday season, but keep this tip in mind for next year. Once you know how much money you're planning to spend on the holidays, divide that amount by 12. Then, save that amount of money each month. For example, if you plan on spending $1,200 on the holidays, you'll need to save $100 a month. When the holiday season rolls around, you'll have all the money you need in your savings account already.
Cut back on other optional budget categories, if needed.
What if, as you review your budget, you realize you don't have much extra money to set aside for the holidays? Then it might be time to cut back in other budget categories. Since holiday spending is technically an optional form of entertainment, the first categories you should cut back are your other entertainment budget categories.
Maybe you could stop attending your yoga classes weekly and exercise in your own living room for two months to save some money for the holidays. Perhaps there is a streaming service you could cancel. Or maybe you could stop going out to eat for two months leading up to the holidays.
Plan on attending fewer celebrations.
A good way to keep your spending on budget is to be judicious about which celebrations you attend. Are there any celebrations you attend out of obligation, but don't really enjoy? Consider cutting these out this year. You may save $50 on the meal, or $20 on the secret Santa gift that's expected if you attend. Set your budget, and then choose the celebrations that fit within it.
If you start early with holiday budget planning, you'll have more time to save, and you'll also have more time to decide where your money is best spent. Remember, the holidays are meant to be fun, and you can enjoy yourself with friends and family without going into debt or overspending. All it takes is a good budget.
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