What Can You Do to Control Holiday Spending?
If shopping in-store and online were any indication, the Christmas merchandise would have you thinking it’s December already! Holiday shopping is already in full swing, so it’s time to start considering your holiday spending plan. Even if you already have a diligent spending plan, do you adjust it to account for the extra spending that pops up during the most wonderful time of the year? Let’s dive into some tips that can help you enjoy the generous giving spirit of the season without going into debt.
Follow the 50/30/20 Rule
One of the most widespread budgeting techniques is the 50/30/20 rule. It breaks down like this:
• 50% of your money goes toward needs.
• 30% of your money goes toward wants.
• 20% of your money goes toward savings.
How do you define needs and wants? Think of a “need” as housing, utilities, insurance and other necessities. A want? Well, that’s everything else. Food delivery, expensive make-up, concert tickets and bedazzling gems are all things you’ll live without. If you like the sound of this type of budget, check out our partner Banzai’s budget calculator!
How can you factor this into a holiday budget? You’ll need to trim down spending on some of your wants to make room for holiday gifts or hosting supplies.
Create a Flexible Budget
Does creating a traditional budget with rigid numbers give you the “ick?” We’ve got an alternative for you! In a flexible spending plan, you divide your money into four categories: fixed, flexible, non-monthly and savings. Fixed spending would include monthly bills like housing, utilities, etc. Flexible spending would include things like groceries, subscriptions, entertainment allowance, etc. Non-monthly expenses are things that you don’t expect every month … like Christmas gifts!
The beauty of a flexible budget is you define your own numbers instead of fitting it into a rigid 50/30/20 mindset. Using your typical monthly expenses, you can set a fixed number, any expected non-monthly expenses, then set your flexible spending and savings based on what is left over. You can spend $50 on personal care one month and then $100 the next if you treat yourself to a mani-pedi. To make room in your flexible budget, simply spend less on takeout or other wants that month. Its adaptability makes it an easier way for those who get overwhelmed by numbers or don’t enjoy strict spending limits to take control of their spending.
Holiday Club Savings
Our Holiday Club savings shares are another way to help save money for holiday spending. Simply set up an automatic transfer each month into that account and you’re golden. If you save $10 per biweekly paycheck, you could save $240 without even thinking about it! When using a Holiday Club savings share, that amount gets dispersed into either your Checking or Prime Share Savings on the first business day of November. Don’t worry, if you ever need to tap into the fund during the year for an emergency need, you can withdraw the money any time.
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