The holidays may be a time of giving and joy, but they may also be a time of financial stress. Before you rip your hair out, here are 5 ways to set money boundaries during the holidays.
Quick Overview
- Identify Wants vs. Needs
- Set a Spending Limit
- Minimize Your Gifting List
- Make Automatic Deposits
- Make a Plan
1. Identify Wants vs. Needs
Prices for consumer products fluctuate around the holiday season. Typically, this is also the time for more impulse buying. So what is impulse buying? Impulse buying means you make an impromptu decision to purchase a product or service before buying it.
These spur-of-the-moment decisions may be tricky to resolve since you normally don’t plan on buying something you didn’t want initially. What if your impulse to buy something is something you need? To discover how to stop impulse buying, you may need to look at why you do it in the first place. Possible reasons could include:
- Special promotion or sale (although this can be a money-saver in certain situations)
- Peer pressure (you want to look good in front of your friends, right?)
- Emotions (stress, anxiety, etc.)
The holidays may be the best time to start identifying your wants versus your needs, especially when surrounded by endless flashing sales and promotions. Ask yourself, “Do I really need this?” Doing so can help you save a bit of cash and build greater self-control over how you spend it.
Whenever you go shopping, whether online or in person, avoid places or situations where you might feel pressured or tempted to buy something you don’t need or that’s out of your budget. Delete or remove apps if you have to. If you’re with friends or family, mention that you’re on a budget or are trying to save money. Most will understand and respect your decision and leave it at that.
2. Set a Spending Limit
Next time, before you go shopping, consider making a spending limit or budget and plan on reviewing it frequently. How frequently? It could be daily, weekly, or monthly. But it should be enough to help you stay on top of your finances so you don’t go over what you can afford.
Setting an allowance can prevent you from going on a shopping spree and save money toward other expenses that may be essential.
3. Minimize Your Gifting List
What’s another way to reduce your holiday financial stress? Minimize your gifting list.
It may be hard to do at first, but the truth of the matter is that you can’t afford to buy everyone you know a gift, especially when Christmas comes around every year. Even though you get along with your next-door neighbor, they may not be your best friend.
Limit who you send gifts to by only buying a gift for immediate family members. The rest will graciously accept a plate of homemade cookies or a little bag of inexpensive chocolate or candy.
4. Use a Money-Saving App
If you want to reduce even more of your holiday financial stress, a money-saving app can help. PrizePool is one example where depositors have the chance to win weekly cash prizes and earn monthly interest without the risk of losing their deposit.
Our fun, stress-free product lets you set automatic deposits. These deposits are held with our bank partner, Evolve Bank & Trust, Member FDIC. That means a portion of your paycheck can go directly into a emergency savings account without you having to see or think about it. This strategy helps you avoid spending money that you may need for an emergency or a planned expense in the future.
5. Write a Plan
If you have a plan, whether it’s to save or avoid spending money on things you don’t need, you’re off to a great start. Since we’re human, however, we tend to forget things. Physically writing down your plans will help you to remember your strategies and goals.
That’s why people recommend creating a budget so often – so you don’t forget where your finances are at and what your goals are. It also helps you to establish rules and exceptions when you save money or go shopping.
Set Your Money Boundaries. You’ve Got This.
These 5 methods will help you set your money boundaries for almost any situation and hopefully reduce some holiday financial stress. The only thing left to do is put your plan in action. Happy holidays!