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Christmas Financial Survival Guide

As the holidays are upon us, you may find yourself struggling to keep your head above water financially. It can seem as if the list of purchases never ends, from charitable giving to purchasing Christmas presents for your loved ones

Let’s walk through some tips about sticking to a budget, using credit card rewards points and finding good deals, as well as making a list of gift ideas for each member of your family. By the time you’re done reading, you’ll have a few more ideas about how to handle your Christmas finances and get in gear with holiday budgeting.

How Much Do People Spend on the Holidays?

Curious about how much others plan to spend during the holidays? 

Gallup has recorded that U.S. adults plan to spend more than they ever have compared to the past two years, since before the pandemic. A poll from October found that U.S. adults will spend an average of $932 on gifts this holiday season, more than the average of $837 that they planned to spend in 2021 and $805 in 2020. A total of 37% plan to spend $1,000 or more, 30% plan to spend between $250 and $999 and 17% plan to spend less than $250.

However, an American Express Pay It Plan It survey found that 86% of millennials spent more money over the holidays than they planned to last year. About 21% went over budget by around $500 or more.

These figures can help you gauge how much to spend over the holidays. At the same time, you may want to dismiss these amounts completely and figure out your own budget. 

Expenses to Consider When Budgeting for the Holidays

Some expenses may escape your attention when budgeting for the holidays. For example, you may forget to tip someone or you may forget someone on your list from last year.

  • Gifts for friends and loved ones
  • Travel expenses
  • Food for the holidays, such as Christmas dinner
  • Holiday decorations
  • Gift exchanges at work
  • Gift-wrapping supplies, such as wrapping paper and tape
  • Shipping costs
  • Gifts for kids’ teachers
  • Tips or gifts for service providers, such as hairstylists, dog walkers, etc.
  • Bonuses for employees, such as doormen, nannies, etc.
  • Higher electricity and gas bills (for those who live in northern areas)

It’s worth considering putting together a list, including what you tipped, so you can refer to it from year to year. You can use it to budget and save for next year.

6 Christmas Finance Tips

Let’s take a look at a few holiday finance tips. The costs can really add up, from regular holiday shopping to holiday meals, and put a strain on your budget. A few finance hacks can make the holidays a financial breeze. Remember, personal finance is just that — personal. Therefore, you may consider a few other ways to devote extra money to the right things so you aren’t regretting your purchases in the new year.

1. Save a little throughout the year. 

Instead of dumping all your money from your December paychecks into all of your holiday expenses, why not set aside some money throughout each month? Put it in an account that’s hard to get to. You might even earn some interest on the money if you save in a savings account that offers returns. Consider earmarking an exact amount to save per month and stash it away. Don’t stress too much about the amount, though if you have an idea in mind of how much you want to spend, that’s ideal.

Consider using a budgeting app to save money. Some tried-and-true budgeting apps include Mint, YNAB, Goodbudget, EveryDollar, Personal Capital, PocketGuard, Honeydew and Fudget. If you don’t want to use a traditional budgeting app, you may want to put together an old-fashioned spreadsheet, where you allocate the money you want to save and include every other expense on your list.

2. Look for holiday deals.

Holiday deals abound. From Black Friday to year-end clearances, you can get shipping or a massive discount on the items you want to purchase. Look online for specific items you already have in mind to purchase to avoid mindless spending. As soon as the sales start, have your credit card ready, no matter the time of year

If you want to stock up on Christmas or holiday items after the holidays, don’t forget about purchasing after the holidays. You’ll find some major sales then and will avoid the markup you’ll pay when you purchase before the holidays.

Note that holiday deals may pop up throughout the year — you don’t have to wait for Christmas to start looking. Check out those Fourth of July sales as well!

3. Use credit card rewards. 

What type of credit card do you have? Does it offer rewards? Consider letting credit card rewards accumulate and get a large purchase for free, such as a TV or piece of furniture. Imagine purchasing a gift for your mom or providing your family with surf and turf for free.

However, avoid paying a lot in interest over the course of time. You can avoid paying interest by paying off your credit cards every month. 

Check interest rates on your credit cards to find out how much you might owe if you don’t pay them off right away. (It doesn’t hurt to check on cash back rewards, either.)

4. Make a list of those you plan to buy for.

Which family members (and extended family) and friends do you plan to put on your holiday budget list? Put together a list of those who deserve a spot on your Christmas shopping list. You can put together a list and look back on it, so you don’t forget what you’ve given in previous years. Don’t forget to list the amount you plan to spend on the perfect gift on each person. That will help you budget prior to and for each Christmas seasons later on. You may want to put the following individuals on your list:

  • Parents
  • Spouses
  • Siblings
  • Grandparents
  • Children
  • Coworkers
  • Secret Santa designee
  • Bosses
  • Teachers
  • Service providers
  • Your employees

When you put together a list, you withdraw an exact amount from your bank account that you’ve earmarked for these individuals. That way, you face fewer surprises with your Christmas money.

5. Get a side hustle.

Christmas spending may require that you get a side hustle to handle the expenses. You may want to get a temporary gig for just the holidays. On the other hand, you may prefer to keep your side hustle after the holidays to save for next year! Let’s take a look at a few side hustle options you may want to consider:

  • Dropshipping
  • Selling handcrafted products
  • Freelancing
  • Teaching online courses
  • Affiliate marketing
  • Dog walking
  • House sitting
  • Delivering groceries
  • Ridesharing
  • Becoming a handyman
  • Becoming a virtual assistant
  • Babysitting
  • Teaching yoga

As you can see, the options are endless. Find your talent or gift and start putting up those flyers! You can even find last minute side hustle options for businesses in your area looking for extra help during the holidays.

6. Get creative and save money.

How can you save money on Christmas gifts or other holiday gifts? It’s easy to overspend, so consider how you might save on holiday spending. Gift-giving doesn’t have to blow your Christmas budget out of proportion.

Think outside traditional holiday gifts if you still need to save money. Gift cards, spending time with your family family members, DIY gifts, even second-hand gifts when presented with an excellent option, etc. — all of these can offer a great option to traditional holiday presents.

If you’re running out of options, consider looking into quick shipping from Amazon.

Don’t forget that our gift recommendation for kids this holiday season will grow along with the kids in your life. Get started and build a nest egg for your kids with UNest. UNest offers flexible tax-advantaged custodial accounts for minors. All family members and friends can contribute funds to a child’s UNest Investment Account for Kids using a shareable gift link.

Get Holiday Finances in Line

It might seem like an insurmountable task to get your Christmas finances in line prior and during the holidays, but remember that it is possible to save money during the holidays. It takes some planning and requires some budgeting, but it’s worth creating those opportunities for yourself.

If you’re having trouble figuring out how to get through the holidays without overspending, make sure you get your whole family on board. Tell your kids and spouse or other family members how important is is to stay on task, budget-wise, and move in that direction as a team.

Ready to save for your child’s future with UNest? Why not save on taxes with a UNest Investment Account? The first $1,100 of the earnings is completely tax-free! Send a gift.

This material is for informational purposes only and should not be construed as financial, legal, or tax advice. You should consult your own financial, legal, and tax advisors before engaging in any transaction. Information, including hypothetical projections of finances, may not take into account taxes, commissions, or other factors which may significantly affect potential outcomes. This material should not be considered an offer or recommendation to buy or sell a security. While information and sources are believed to be accurate, UNest does not guarantee the accuracy or completeness of any information or source provided herein and is under no obligation to update this information.