Tips on how to survive, and enjoy, the holiday season without going broke!

Do the holidays make you feel exhausted, stressed out and in need of a vacation? For many people, the holiday season isn’t about spending time with their loved ones or enjoying the Christmas and New Year’s parties, but is associated with financial concerns and over-spending. The good news is that it’s completely possible to go through, survive and even enjoy the holiday season without going broke!

Start with creating a budget or, rather, a spending plan. Try to set yourself a realistic goal and establish how much you want to spend – and how much you can actually spend – on gifts. Setting a gift budget for each family member or friend is extremely important, but you have to also stick to it. Establish clear boundaries, before embarking on your traditional Christmas shopping to avoid being tempted into going over your budget. It’s important to remember that not everyone can afford the most expensive items and you shouldn’t be embarrassed if your budget is a bit tight this year – after all, it’s the thought that counts.

holiday money tipsIf you’re feeling creative or want to show off your artistic side, consider making gifts, rather than buying them. People tend to cherish homemade gifts more, especially if they look like you’ve put quite some time and effort in making them. If you lack any ideas, browse Pinterest or the web to find inspiration.

If you do decide to go with store-bought presents, however, make sure you always use cash, instead of your credit card. This applies to doing any type of holiday shopping, actually – including party treats, decorations or clothing. Using a credit card gives you an illusionary feeling that you’re not actually spending “real” money. Paying with cash will not only help you keep track of your finances, but it’s also a generally good idea, especially if you’ve already built up a substantial amount of credit card debt. Adding debt on top of debt to buy gifts for others is one of the worst choices you can make with your finances. There is no real friend around who doesn’t understand that you can’t afford to buy them something from the store.

Personally, I have lots of girlfriends and each year, IF we exchange anything at all, it’s normally sharing a meal or giving a special candle or bottle of wine or even their favorite batch of gluten-free cookies (one of my specialtiesJ).

Be smart not only about the type of gifts you’re buying, but also the stores you’re purchasing them from. If you’re buying online, check out coupon sites – it takes less than a minute to find a coupon that will substantially reduce your spending and might even help you add a couple more things to your cart for free.

Also, if you shop online, consider finding stores that offer free shipping. Many times during the holidays, free shipping is an enticement that stores love to offer to increase their sales. Take advantage of free shipping any time you can.

Lastly, do you know why people tend to go over their budgets during the holidays? Well, it’s because shopping is fun and is actually biologically rewarding.

Studies consistently demonstrate that purchasing something prompts your brain to release dopamine, a chemical that makes you feel happier. When excited, people tend to spend more, and for many people, buying even a single item can result in an unstoppable shopping spree. In fact, Yale scientists have a term for this phenomenon and it’s known as the “shopping momentum effect”.

To break free from the vicious cycle, take a break after every purchase. If you’re buying your gifts online, turn off your computer for a couple of minutes and distract yourself with something else. Go out for a short walk, and when you come in, consult your budget and your lists to make sure you stay on track.

The best way to make sure you can survive and actually enjoy the holiday season is to start planning well in advance. Just having a spending plan might not be enough…if you don’t actually have enough pennies in your bank account.

Allocate (save…as in not spend) a small amount of money on a monthly basis earmarked for the holidays and you might even go so far as to set up a savings account for the next holiday season – start as early as possible. Even saving as little as $20 per month can make a huge difference!

So you see…it doesn’t take much to survive the holiday season: just a little bit of planning and some intentioned self-awareness!

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