Let’s talk about smart financial planning. Did you know that includes carving out part of your budget for spending on fun and being cheerful toward others? Of course it does! 

The holidays are a special time of year when each of us has the opportunity to enrich someone else’s life or make an impact on causes we care about deeply, all in the spirit of joy and goodwill. You have the power to make that part of your yuletide, and with a bit of prep work and savvy shopping strategies, you can say “good riddance” to credit card bills that sometimes look daunting come the new year.

More Record Spending in Store

This year, Americans will spend close to $1 trillion during the “season of giving,” according to our projections based on recent trends laid out by the National Retail Federation. That means each adult could spend upwards of $2,000 if the pace of November through December retail activity pace keeps up. It’s no small wonder that falling into (or deeper into) debt plagues so many of us—particularly those in their 20s and 30s who might not have much money wiggle room.

So, we need to make sure our budget game is tight before jolly old Saint Nick comes down the chimney. Our team went to the drawing board and crafted 7 budget hacks sure to make your holidays a period of merry festivities and not a time filled with spending stress and regrets!

1. Write down a list of who and what you’re grateful for.

Wait, what’s this have to do with personal finance? Well, like anything money-related, we want you to be sure your financial goals are aligned with your values. Jotting down the names of people most impactful in your life gets your head in the right place before you venture out into the dangerous and stimulating retail world. And it must be a good first step—Santa Claus does the exact same thing with his list! 

2. Create a holiday budget.

List in tote, you are now mentally prepared to crunch some numbers. This isn’t high-finance stuff, either. Simply assess your income, expenses, and current savings situation. If you’ve had a solid year of growing your net worth and investments, and have an emergency fund in place, then you are in great shape to decorate your year-end budget tree with all sorts of sentimental ornaments and flashy tinsel. But if you see that your savings are stretched thin, don’t feel bad about taking care of yourself first. (We have a tip for you later on, too!)

3. Be a smart shopper.

The holiday spending season seems to start earlier each year. Before Halloween, the big stores bring out their Christmas decorations all in an effort to get us to whip out our credit cards earlier and more often. You can combat their tactics by crafting your own strategy. 

After calculating your budget and knowing on whom you want to spend, always keep a watchful eye on sales. If there are still months until Santa’s Big Scene, then you can buy certain items on the cheap during the off-season. 

Consider setting up email alerts from your favorite shops and don’t miss out on Black Friday deals (which usually last throughout Thanksgiving week—no need to camp out in the cold!). Another tip: Don’t be bashful about haggling and requesting price matches. And if travel is your big budget buster, then buying airfares in late August and September can really save you some dough.

4. Playing the credit card points game.

If you are disciplined with your personal finances, then scout the credit card landscape to see what the best sign-up bonuses are, and which cards have top-notch rewards programs. The NUMBER ONE rule, though, is to always pay your balance off in full each month to avoid paying interest. Recent reports show that the average interest rate on credit card debt is near a new record, and one mistake can set you down a dangerous money road.

5. Spread cheer by shopping local.

Facing a big credit card bill is like getting a visit from the ghost of Christmas Past! But let’s get back to why it’s the most wonderful time of the year. Cookies, eggnog, candy canes, nutcrackers... doesn’t that just bring a warm feeling to your heart? If not, you might be a Scrooge! 

Now take that feeling and put it into action. Part of spending wisely over the holidays is being intentional about what and who you are supporting. Shopping locally gives back to your community. You might even strike up a conversation with someone at a nearby shop (and who knows where that might lead—if Hallmark movies are anything like real life!). 

Remember earlier when we mentioned a tip for those who do not have extra cash to spare? Well, get creative and consider making your own presents to adorn under a tree. A few bucks at a local craft store, a cool idea, and a star-lit heart are all you need to celebrate the season.

6. Say no to fees!

I know one special someone who you might have left off your list. It’s not your parents, your partner, or even a friend. It is YOU! Deliver peace and joy to your future self by reining in your spending if going overboard means facing big credit card bills in January along with possible fees. Being frugal doesn’t have to mean being miserly either; find creative ways to celebrate and show your love without breaking the bank. Along with being mindful of credit card fees, be like a detective for Christmas-related junk fees the retailers might try to pull off on you. 

7. Buy now, pay later (but be careful).

One specific strategy to take your holiday dollars a bit further is to consider other payment options. Installment plans known as “buy now, pay later” allow you to make a big purchase and then pay it down over time rather than all at once. Your parents might know of this payback method similar to “layaway.” The major difference is that with “BNPL” you can take your treasures home the same day and later pay a third-party financing provider. Once again, however, if you miss a payment, you should expect to be slapped with hefty fees and interest charges.

Here’s a bonus tip: Pay cash whenever possible. Rather than swiping or tapping with a card or app, doling physical bills makes us feel the financial impact more, thereby leading to more mindful spending. The “Cashless Effect” can work wonders for spendthrift folks who tend to get a little too credit-card happy.

The Bottom Line

Christmas sweaters, holiday movies, hot cocoa by a warm fire on a cold winter’s night...who doesn’t love this time of year? It’s our favorite at Allio. Retailers sure love it, too. They entice us with sale after sale and are always compelling us to spend with reckless abandon. You can beat them at their own game, though. With a bit of reflection, planning, strategy, and execution, your holidays can be filled with great joy all while ensuring your budget is in a good spot as we ring in the new year.