For many of us, the holiday season has drawn to a close, and if you’re now facing the aftermath of those festive purchases, this is an ideal moment to sit down with your family and evaluate your expenses. According to USA today, the average holiday shopper was expected to spend $1,652 in 2023. Let’s redirect our focus to preparing for the upcoming year, below are 4 steps to boost your shopping confidence heading to the 2024 holiday season.
Step 1: Assess the extent of any debt you may have.
If you carry balances on multiple credit cards, consider employing the Snowball method to eliminate your debt. This involves making the minimum payment on each debt and allocating extra funds to the one with the smallest balance. Once the first debt is paid off, apply the minimum and extra payments to the second smallest debt, and so forth. Achieving small victories along the way can serve as motivation to overcome the challenge of debt.
Step 2: Gather your receipts.
If physical receipts are unavailable, review your debit or credit card statements. Use this information to establish financial goals for 2024.
Step 3: Contemplate opening a savings account and automating a portion of your income to contribute to it.
For example, if your combined holiday expenses were $1,100, consider spreading this amount over 11 months, resulting in an approximate monthly contribution of $100. Then, set automatic triggers in your checking account to your designated account. You can name it “Holiday Fund” or something similar.
Step 4: Utilizing the Funds.
This can be the most challenging part, as it may take breaking old habits of overspending.
When ready to use the funds, opt for cash or transfer to a debit card. This approach helps you track your expenses and prevents exceeding your budget. Now, Ii you happen to go slightly over budget, be kind to yourself—you’ve already put in the effort to save. Allow yourself some grace in such situations.
Remember, the holiday season is an opportunity to gather with family and create lasting memories, not a time to stress about finances. By reflecting on past purchases, you gain insights into budgeting and can better prepare for the next holiday season.