4 Ways to Budget Your Family Spending for the Holidays

Every year I look forward to the holidays to spend time with my family and make new memories. But the holidays can also be stressful from planning for travel and budgeting for gifts. To help keep our spending in check, we caught up with Pamela Capalad, the brain behind Brunch & Budget. Pamela is a Certified Financial Planner with over 8 years experience working at wealth management firms and now uses her financial savvy to educate and empower everyday people to take control their money and lives. Pamela lays down 4 foolproof tips to help you avoid overspending during the holidays and racking debt into the new year.

1. Start with the overall budget you’d like to spend and work backwards from there.

It’s always helpful to begin with the end in mind. Often, the holiday season sneaks up on our budgets, but if you have a number you want to target, it makes planning much easier and puts you in control of the holiday spending.

To come up with the number, think about what you spent last year and where you felt you overspent. Keep in mind that holiday spending also includes additional food spending for parties and get-togethers as well as travel costs to see family and friends.
2. Make a list of family and friends who you definitely want to receive gifts and shop for them first.

The holidays can end up making you feel like you need to give a gift to everyone you know, especially because you will always have that one coworker or neighbor you didn’t think of who has a little something for you. Just remember this - gift giving doesn’t have to be a two way street.

Before you go out and buy a bunch of small gifts to give out of obligation, take a step back and reflect on why gift giving is important to you and plan accordingly. The best way to start is to make a list of the people in your life who you definitely want to give gifts to and the approximate cost you want to spend on each person. That cost can be made up of one gift or many small gifts.

Use the overall budget number you came up with above as your guide for how much to spend on each person.
3. Don’t get caught up in holiday sales.

Retailers know these last few months of the year can easily make up for the lack of sales from previous months and they advertise accordingly.

From Black Friday, Cyber Monday, and any other sales leading up to Christmas, retailers are trying to get your attention in any way possible and get you to buy one or two extra things.

Watch out for words like “x% off original price” or “buy one get one half off” or “only 5 available” or “mail in rebate.” These are all marketing tactics to get you in the door to buy more and feel good about paying less.

This is also why it’s so important to plan your spending ahead of time. By going in with the end in mind, you’re much less likely to be tempted by these sales. If you focus on your list and happen to land a sale for something you were already looking to buy then you’ve succeeded! As long as you resist purchasing sale items not on your list.
4. Use online shopping as a way to stay on track with your budget.

While online shopping can sometimes cause you to spend more than you intended, it can also be used to help you temper your spending.

Do you ever wonder why after a few hours of shopping, you can feel tired? It’s because we have a limited amount of willpower (i.e. the ability to say no), and everywhere we look, we are subconsciously saying no to something, so it can lead to decision fatigue, which can actually make us feel physically fatigued.

When you walk into a store, you’re immediately greeted with ways to impulse buy. Stores are also often designed to purposely walk you through certain parts of the floor to get to what you really want. Couple that with stores understanding that we all have limited willpower, and by the time you get to what you’re looking for, you may already have decision fatigue.

By shopping online, you don’t have to go through the maze of the store to find what you want. You search for it and buy it. You can also put a number of things in your online cart and easily walk away from it before deciding to click the Buy button.

Pamela Capalad is based in Brooklyn, NY serving clients in New York City and virtually across the country. She has devoted her life to financial literacy so you can devote your life to your passions! Head over to Pamela’s website to find out how to build a life you never want to retire from in her FREE ebook Why You Should Never Retire.

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