What makes a holiday special? Opening gifts usually tops the list for children, and the joy of giving them can be a big part of the anticipation for the young at heart—but 90% of Americans wish for a less materialistic holiday season.[1]
Once the wrapping paper is bagged up and the feast is split between bellies and leftovers in the fridge, it comes down to the time spent together and the way we express our deepest values. Gifts, banquets, and candles in the windows are supportive rituals rather than end goals, and it’s easy to get caught up in the squandering on display everywhere you look.
This year, start with these tips to take the reins in your holiday spending.
Set a Holiday Budget
You’ve probably heard this one before, but it is the keystone of smart holiday shopping: create (and stick to) a budget. A budget is important for:
- Understanding how your holiday shopping fits into your total monthly and annual budget
- Visualizing the full cost of holiday spending and avoid runaway “one more thing” buying
- Ensuring your spending is consistent with your values and wishes for the season
- Tracking your spending as you go
New to budgeting? You can try out apps, set up old-school spreadsheets, or simply grab a pen and a pad of paper. Start with limits for each planned expense, and track actual costs as they come in. You may want to include:
- Gifts for each person
- Travel costs such as hotel, gas, airfare, etc.
- Entertainment including food, host gifts, and special activities
- Holiday decor (don’t forget the electricity bill if your house lights up the block)
Keep a Gift List
If you’re a fan of spreadsheets, then you may already be doubling down on your budget files for this one. A list that shows you exact spending and gift items for everyone on your “nice” list can help:
- Track what was purchased year after year to avoid buying the same items
- Provide a place to record what gifts were big hits or misses
- Balance spending between family members
- Record clothing sizes, favorite scents, gift ideas, etc. throughout the year
Ongoing gift tracking can help you plan spending on items that will be used and appreciated and avoid “just buy anything!” mode that often ends in overspending. With more information on each recipient, you can look for opportunities to save through:
- Regifting
- Sourcing experiential presents
- Making a homemade gift
- Buying second hand
Beware of Holiday Debt
If you’re among the 1 out of 3 Americans who fund over 90% of their holiday spending through credit cards, take a deep breath and consider whether you can afford holiday debt.[2] At its best and worst, a credit card can be utilized similar to these two other financial transactions:
- Debit card – In order to pay off your account each month, treat your credit card like a debit card worth only what you already have in the bank. With this approach, you can pay $0 in interest and penalties while gaining the benefits of building credit and participating in cash-back or rewards programs.
- Personal loan – If you aren’t paying your balance in full each month, then you’re essentially taking out a loan at a high interest rate to fund your holidays. Even the best credit cards generate debt that can cost you dearly to pay off over time. If you wouldn’t take out a loan at the bank for what you want to put on your credit card (over what you can pay off immediately), then think twice about using it.
Apply this logic to your holiday spending, so you’re aware of whether you’re simply streaming affordable purchases through a card that can be paid in full at the end of the season, or stacking up expensive new debt.
Depend on Your Credit Union This Holiday Season
This holiday season, if you don’t already bank with the best credit union in NJ, switch to NJFCU and give your family a gift that keeps on giving.
At North Jersey Federal Credit Union, we’ve put our members’ interests first since 1936. As a not-for-profit financial cooperative, NJFCU can offer the lowest interest rates and best credit union credit card terms along with security standards and tools to support all your banking needs. We can help you save, budget, and make your money grow to support your goals, from a gingerbread house to a new home.
Discover all the benefits of being an NJFCU member and apply today!