6 things you should do now to help you financially prep for the holidays

It’s exciting to think about the holidays this year — seeing loved ones, exchanging gifts with each other and catching up.

However, while your heart and mind may be ready, your wallet might not be on the same page just yet. Some people wing their future spending, but it may cost you more.

Here’s how you can financially prepare for the holidays to enjoy the festive season with ease.

1. Finalise your holiday budget

Decide how much money you can afford to spend during the holidays. It’s often a busier set of months compared to other parts of the year because of all the gatherings.

Presents are also the biggest factor, as consumers planned to spend an average of $1652 on gifts during the 2023 festive season.

Keep your budget as realistic as possible. If you want to boost your budget, seek a temporary stream of income such as a side hustle or finding clever ways to earn extra money. After all, a small buffer in case of price hikes during the holidays can give you extra peace of mind.

2. Start making your shopping list

Channel your inner Santa and make a list of presents. Stick to your budget and divide it among the number of individuals you plan to give a Christmas gift to. You can dedicate more or less funds depending on your relationship with the person you’re gift-giving to.

Here are examples of what to put on your Christmas shopping list: 

• Material items: Does your best friend need a new appliance? Have your parents been hinting at buying a new carpet? Give your loved ones something they need or want. Remember to be realistic when checking price tags and focus on getting good-quality items. You can wait for Black Friday and other sales to get a good deal.
• Experience-based gifts: Experiences are a lovely way to send the gift of adventure. You can get an annual America the Beautiful National Park Pass for about $80 for travel and outdoor enthusiasts. For people who prefer relaxation, book them a hotel and spa staycation, a wine tasting experience, or tickets to a show at a local theatre.
• Personalised presents: A small and thoughtful gift is ideal for friends and acquaintances. Write them a heartfelt letter to express gratitude, or create a painting of their favourite flowers. You can also create time-based gifts by making a coupon pledging to babysit or help with chores.
• Edible gifts: One of the best parts about giving an edible gift at Christmas time is that it supports zero waste living and an eco-friendly lifestyle. The recipient can enjoy the gift when consuming it, then when it is finished there is no clutter left behind. Consider items like premium olive oil, coffee beans, honey or fancy chocolate.

3. Create a dedicated fund for the holidays

Saving is a key skill when you’re trying to financially prepare for any expenses. Start a dedicated fund a few months before the holiday season. You can create separate groups for gifts, travelling, parties and more.

You should wait until you reach your fund goals before using them. However, you can also schedule withdrawals. The same principles of spacing out your purchases relieve rushed purchases and financial strain throughout the year.

4. Control your spending habits

Spending habits impact your financial health. As you prepare for the festive season, you need a better grasp of your dollars. For example, try to use cash over a credit card when paying for something. About one third of consumers took on debt for holiday spending last year.

If you must use a credit card, remember to set a personal reminder to settle it as soon as possible. That way, you won’t have a price tag hanging over your head while trying to relax and mingle with loved ones.

5. Finalise travel plans

Some people travel to see family and friends at the end of the year. If you do, it’s best to book flights or rent a car before the holiday rush. Set aside money for accommodation and gas.

People are usually more self-indulgent during the holidays, treating themselves to a first-class ticket or fancy hotel. Budget for those prices, and look for affordable backups in case you want to save.

6. Plan out holiday parties

Party hosts should plan their budget. About 60 per cent of Americans expect to spend $550 on holiday gatherings, with a big chunk going into food and drinks.

Hosting a budget-friendly Christmas party that incorporates the needs of your friends and family is easier than you think. You can prepare a home-cooked meal, encourage friends and family to bring a side dish, organise an inexpensive secret Santa gift, and reuse decorations from last year to keep costs down.

Have a festive financial prep

There are only a couple of weeks until everyone’s ready to put on their holiday festive wear and celebrate.

Ensure you’re financially prepared for what’s to come in advance. The extra time and effort your put in now will help you avoid money-related headaches after the festive season and into the new year.