Before you know it, the holiday season will be in full swing. From gift-giving to festive gatherings and long-anticipated travel plans, there’s plenty to look forward to this time of year. However, it’s easy to get lost in the excitement and let costs spiral without realizing it.
According to PwC’s 2024 Holiday Outlook survey, overall holiday spending is expected to increase by 7% from last year, ringing in at a total of $1,638 per shopper on average.
Whether you anticipate spending more or less than this amount, creating a holiday spending plan can help you stay on budget and avoid overspending. This way, you’re ready for every occasion and don’t have to miss out on any precious holiday moments.
Below, we’ll walk through some simple steps to creating a solid holiday spending plan.
Step 1: Review Last Year’s Spending
Start by reviewing how much money you spent during the previous holiday season. This will give you a good baseline for the amount you’re willing to spend this year.
Recall if you went overboard in any particular areas, which will help you cut back in the current year or reallocate the funds to different categories.
Step 2: Set a Budget for the Current Year
With your past spending data, you can decide whether you want to spend the same, more, or less this holiday season.
Consider some factors that might influence your decision, like if you got a new grandchild in the past year, got a raise at work, or had to make some large home repairs in recent months.
For instance, maybe you spent $1,200 total on holidays last year. But, you have since started a new position at work, and have some more discretionary income. In this case, you might decide to allot $1,500 for holiday spending.
Step 3: Break Down Your Spending Categories
After setting the total spending limit for the holiday season, you need to break your plan down further and budget for specific categories like gifts, travel, and events. Though it can be a bit tedious, doing so will give you a better idea of how much you should spend on each occasion, helping you stick to your plan.
Consider your unique holiday traditions that will impact your spending. Maybe you always attend the Nutcracker, which you’ll need to purchase tickets for, or you have a gift exchange at work that you plan to participate in. Make sure to budget for these events.
Also, consider the specific people you plan to give gifts to, and set a dollar amount for each to help you stay on budget. While this might feel a bit uncomfortable at first, it will help you enjoy guilt-free gifting for everyone on your list.
Step 4: Monitor Your Spending
Your holiday spending plan is only effective if you stick to it. Again, the more thought and detail you put into your plan initially, the easier it will be to understand exactly what you can spend on each festive occasion.
As you begin holiday spending, keep track of all purchases to see how well you’re sticking to your plan. Hold onto all receipts, and keep a tally of your total spending to see how much of your holiday budget remains after each purchase.
Consider using personal checks for your shopping this holiday season, which gives you a clear paper trail for monitoring your spending. Plus, if you want to gift money to a loved one, a holiday-themed gift check makes it simple with a thoughtful, personal touch.