According to a recent poll that came in last year, courtesy of Gallup, the average American from the middle class spends up to $830 a year on Christmas gifts. That’s a lot of money.
As Christmas is the largest annual gift-giving Holiday, the final months of the late fall / early winter season account for over 20 percent of retail sales, making it the most expensive year for shoppers.
It’s surprising to see, in numbers, how much money we spend on Christmas each year. As an example, we spent $600 billion during last year’s Christmas season. The closest matching season that has any other significant annual expense was the Back to School sale, which only brought in $72 billion. In other words, the Christmas season brings in over nine times more money than any other season combined.
Because of all this money being spent, it’s adverse effects begin to show as January rolls around. Regret over all of the money spent, increased stress, tighter finances, and higher-than-expected credit card statements. These are just a few. It tightens the paychecks of Americans nationwide.
There must be a way that we can avoid all of these adverse effects that roll around every year. If you had this thought, then you would be absolutely right. Here are our top six picks to help you save money this coming Christmas season.
1. Track your spending
One key component to saving money and breaking spending happens during the rest of year, but especially during the holiday season, is to track your spending on a daily basis. This is important to have solid financial stewardship and is a good way to avoid overspending your money.
The seriousness of tracking your spending during the season cannot be overstated; you don’t need any fancy calculators or software to accomplish this, either. All you need is a detailed ledger or even a piece of paper. Just write down what you spend every day, and keep track of your balance.
2. Set a good budget
Before the Holiday season begins, be sure to look through your checkbook and see what you have already set aside for gifts. From there, decide how much of that you want to spend. Make sure to set aside smaller chunks of money not only for gifts but food, travel, etc.
3. Look for shortcuts that make traveling less expensive
Depending on the size of the family, traveling can truly be one of the most expensive luxuries during any holiday season. A few tips to save money on traveling would be to pack food for on the go snacks instead of stopping to eat, packing light to save on baggage fees, shopping through different airlines to pick the best departure/arrival dates, and more.
4. Be aware of the various retail tricks!
Even if many of us have budgets planned out, we can still overspend. This is especially the case with ‘sales’ and ‘flash sales’ as well as the other standard loyalty card and decoy pricing scams. Be aware of exactly what benefits (or lack thereof) that your loyalty programs offer.
5. Cut down on ‘convenience’ pricing
Some kinds of hidden holiday costs come in the form of ‘convenience’ pricing. The stress and busyness of the holiday season break our habits (whether it be in health or spending) and disrupts our usual family rhythms. Sometimes, it is just easier to order a few pizzas for the kids if we need to run to the office holiday party. Be smart about your spending, and try to avoid convenience-oriented money traps!
6. Establish correct expectations ahead of time
If you decide that maybe spending $250 on each of your five kids for Christmas isn’t the best idea, be sure to establish those expectations earlier, and tell them why you’re cutting down. As an example, our kids get three kinds of gifts for Christmas; one thing they need, one they want and one experience to share with the rest of the family. (Travel or something related.)
Now, certainly, there’s more than this (below), but these are the biggest and smartest money saving techniques. Happy holidays! Check out the video below for more.