Financial Planning Tips: Holiday Budgeting Like A Pro

How To Stay Financially Fit This Holiday Season

The holiday season has arrived and as attention shifts to the gift-giving to come, implementing the right financial planning tips can help you navigate the holidays like a true financial pro. Everyone has preferences when it comes to funding their holiday celebrations but there are a few essential preparation tactics and money-managing strategies that can help you stay in control while making the most of your time spent with loved ones.

Tip #1: Evaluate Your Spending

One of the first financial planning tips for the holidays begins before you start mapping out your funds for the annual shopping season. You’ll want to start by evaluating your spending for the year to get a better understanding of where you are in your financial journey. If you already have a budget you’ve been working on throughout the year, this could just be another check-in. If you’re in the early stages of your journey, you can start by calculating how much you have to work with for your holiday plans by subtracting all your monthly expenses from your total net income. You can do this manually or use one of our Austin Telco financial calculators.

This would also be a time to see where you are with the goals you’ve set for your spending, contributing to your nest egg and reducing your debt. Getting reacquainted with the financial goals that you set for yourself at the beginning of the year and evaluating how far you have left to go will help keep you focused when moving on to set your budget.

Tip #2: Make A Plan And Stick To It

When it comes to financial planning tips, budgets are a great strategy to use year-round since they are created with the idea in mind that they will likely need to be adjusted to account for seasonal constraints and surprises. Therefore, it’s recommended that they go through some sort of evaluation every month. The holiday season is likely a time when a new spending budget will be set. This budget should be a fixed amount that is understood by everyone responsible for making financial decisions so that it can truly be stuck to.

If you’re one of the many that get swept up in the rush of buying gifts for the people you care about, it’s important that you can reference back to the budget you’ve created for yourself. Spreadsheets are a popular way for people to maintain a physical copy of their budget. At Austin Telco, we offer all of our members access to our FREE Money Manager tool that simplifies your budgeting as well as expense tracking, and account aggregation. It’s a fast, easy and secure way to stay on top of all your spending during the holiday season and all year long.

Tip #3: Stay In Control Of Your Debt

Another important money management tip you should consider during the holidays is paying off your debt. This should already be a priority in your month-to-month budgeting, so when it comes time for the holidays, make sure you don’t work backward by mismanaging your credit. You don’t want to fall into the overspending trap that people sink into when they use their credit cards to supplement their budget. Even when buying your gifts for the holidays, a general rule of thumb is to always plan to pay off your balance in full each month.

Managing your balance and paying it off in full will keep you from having to make high-interest payments on your remaining balance in the months to come. It will also help you reduce your debt while opening you up to the ability to qualify for lower-interest credit cards in the future. How you pay off your credit card plays a part in your credit score as well, and a bad credit score is not how anyone wants to start their new year.

Tip #4: Gift Like A Pro

A lot of preparation goes into conquering the holiday season like a financially savvy pro but it all pays off when it finally comes time to start spending some of those diligently managed funds. Now that you know how much you have to work with, there are a few tricks that can help you stretch out what you have to work with and really get the most out of the holiday season.

Starting early is a universal tip, with many beginning their shopping as early as the summertime. However, the fall and winter months are packed full of sales on items in every department, so there’s still a chance to save. There are also seasonal shopping events like Black Friday and Cyber Monday that offer mass deals on some of the most sought-after gifts of the year. Overspending is a frequent occurrence during events like these, so try to purchase one gift at a time to avoid going overboard. For those that just can’t stand shopping, or the gift-purchasing budget is a little low this year, a meaningful DIY gift can help spread the holiday cheer just as much as anything else could.

Tip #5: Save, Save, Save

Budgeting for the holidays is not all about spending. Seeing what you have to work with this holiday season may open your eyes to where you want to be next year around this time. Start saving for next year as early as today and open a holiday savings account. Accounts with higher savings yields (i.e., Money Market Accounts) will help you grow your finances over time and provide you with more money to spend when you need it.

Continuing to build your current savings during the holiday season will also help you be in an even better place financially next year. The known rule for savings is to put aside at least 5% of your take-home pay as an emergency fund for unplanned expenses and financial emergencies. A great option for people who want to stay disciplined in building their savings during the holidays is to split direct deposits between savings and spending accounts for the rest of the year. If it works for you, it can be a strategy you take with you into the new year.

The holidays don’t have to be the most stressful time of the year when it comes to finances. Austin Telco wants you to feel secure in the steps you’re taking to build your financial future. We are here to offer you all the tools you need to be successful in getting where you want to be, including additional Financial Planning Tips you can use to stay on track year round. Take control of your finances this holiday season and contact us today to learn about the resources and services available to you as an Austin Telco member.