You made your list. You checked it twice. You even have a budget. You’re ahead of most people when it comes to the holidays.
But don’t get cocky just yet. You may make some critical mistakes that can break your holiday budget. Learn what they are and you’ll keep your budget and your sanity in tact this holiday season.
Five Mistakes That Can Break Your Holiday Budget
Mistake #1: Buying the first item you see.
Okay, so your kid wants the hot new gaming system. You’ve budgeted it and you know you can afford it. You head out to the big box electronics store to grab the item.
But wait! Have you done your research? Is this the cheapest you can get it for? Are there any promotions or online coupon codes that could save you money? Just because it fits your budget doesn’t mean you should spend that amount. You might be able to save money. Chances are, there will be a few surprises during this holiday season and a few bucks saved now may come in handy later.
Mistake #2: Not tracking your expenses.
One of the most common mistakes people make when creating a budget is they don’t actually track how much they’ve spent. How will you know then if you’ve stayed on budget?
You can use a budget software like YNAB or create a budget spreadsheet, but the truth is that your tracking system doesn’t have to be fancy. You can simply write at the top of a piece of paper how much you have to spend, who you have to buy for and then leave room to write down how much you’ve spent. Clip receipts to the paper so you can quickly do the math, and you’re set. Don’t walk out the door before actually creating a system to track your expenses.
Mistake #3: Not factoring in unforeseen expenses.
Even the best budget-makers miss things. Perhaps you forgot to budget for a gift for your kids’ day care provider. Maybe you forgot the gifts for your kids’ classroom gift exchange. Maybe you forgot that you waned to donate to the Salvation Army toy drive. And then there are other unexpected surprises that come up. The car battery dies, a sink leaks, or the oven quits when you need to bake cookies.
You need to make sure that you budget a little extra for the unexpected. If you don’t leave room in your budget for these expenses, they can put you into debt and cause stress. This is a season to enjoy, not to get stressed about. Create a miscellaneous expenses category in your budget and allocate some money toward it. That way, all your bases are covered.
Mistake #4: Letting our pride and ego get in the way
All too often we buy gifts to impress others. For example, there’s that $50 bottle of wine you gave your friend as a hostess gift. There’s no need to do that. Your hostess would likely be just as happy with a lesser bottle of wine. Then there are the gifts you buy because someone bought you a gift. Or you know a person spends a lot on you, so you feel the need to reciprocate. Forget about impressing others or keeping up appearances. It really is the thought that counts. Don’t let your pride and ego get you into hot water financially.
Mistake #5: Buying too much.
It’s easy to go overboard during the holidays. We want to show people how much we care and sometimes we have trouble figuring out how many gifts is enough. Learn the value of scaling back. Buy your children three gifts this holiday instead of thirty. Scale back on the decorations and really focus on quality instead of quantity. Your recipients will appreciate your gift even more and your budget will be glad you resisted overspending.
It’s easy to go over budget during the holidays. Take the time to make a plan and commit to sticking to it. Remember what the holidays mean to you and focus on that.
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