How To: Manage Holiday Spending

Zoe Team

Dec 1, 2020

4 min read

A financial advisor reviewing a plan with two clients at a table

Key Takeaways

Set a strict holiday budget before you begin shopping.
Prioritize meaningful experiences and gifts over excessive spending.
Track all expenses to avoid post-holiday financial stress.

Frequently Asked Questions

How do I set a holiday budget?

Calculate your total available savings, then allocate specific amounts for gifts, travel, and entertainment.

What is a tip to save money?

Focus on shared activities or thoughtful, lower-cost gifts rather than expensive items for everyone.

How can I avoid holiday stress?

Plan early, track spending in real-time, and don’t feel pressured to match the spending habits of others.

Manage Holiday Spending: Top Four Tips

Feeling stressed about your spending this holiday season? Here are four tips to help you best manage your budget and expenses. Published Dec. 1, 2020

The National Retail Federation estimates American consumers plan to spend $997.79 this upcoming holiday season. As much wonder as the holiday season can bring, it is also a big stressor on your financial life. When people overspend, for example, it can bring far more worry than joy. Having a financial advisor on your team year-round can help manage holiday spending. By creating a holiday spending plan as part of your wider financial plan, it’s easy to save enough money during the year so the holidays can be a worry-free expense.

When it comes to the holidays, Americans are the world’s biggest spenders. According to PwC, with COVID-19, only a little more than half (55%) of consumers have reported they will spend the same or more as they did last year. Additionally, over half have confronted pandemic-altering income levels. With that in mind, it is important to be smart about managing one’s money. So, how to optimize holiday spending? Here are four tips.

1. Set a Holiday Budget

Begin by going over potential expenses. List all expected holiday expenditures, such as gifts, travel, parties, decorations, cards, and charitable donations. By doing so, you can have more clarity on potential spending limits. Once you have a stipulated limit, allocate specific amounts to a corresponding category or item. Then, narrow down shopping options by choosing only items for those amounts. Online shopping is a good way to stick to a more limited shopping list. Plus, it creates the opportunity to take advantage of big sales and save.

2. Keep Track of Expenses

Managing a holiday budget doesn’t stop once it is spent. Begin by actively tracking purchases. This ensures you stick to your budget. If needed, make modifications to adjust expenses so that they are in check for future holiday expenses. By starting to save at the beginning of the year and keeping track of expenses, it’s easier to put aside money monthly.

3. Plan Ahead for Holiday Spending

A financial advisor is especially helpful in keeping their clients on track with a plan for holiday spending. By looking over past expenses with an expert eye, it may become easier to identify things you might have overlooked in the past. Similarly, working with an advisor involves setting realistic expectations from the start about short and long-term financial goals. Having an advisor onboard can make seemingly impossible gifts and expenses far more possible financially.

With 42% of consumers starting their shopping, it is important to account for expected expenses. That said, it’s also about recognizing your own spending habits. Letting your advisor know about a spontaneous or big spender nature is essential. They will know to set some money aside and plan for decisions like a last-minute lavish trip.

This year has likely made planning ahead a little difficult. In fact, one in five holiday shoppers reported they will stay home this year instead of traveling as they usually do. If you’re in this situation, a wealth manager can help relocate travel funds to another purpose, such as contributing to a retirement fund. The bottom line is they will know how to optimize this extra money to enhance their client’s financial plan long term.

4. Build Better Spending Habits

Over time, optimizing holiday spending is about building better spending habits. This might mean opening a special savings account that cannot be accessed throughout the year just for this time of the year. By making small changes to needless expenses, it can be easier to build a holiday budget.

A financial advisor can factor in holiday spending over the years to better manage their client’s finances. They can consider how you spend when advising on a yearly budget, particularly by making sure it doesn’t come as a big hit when the holidays come around. Similarly, they can make changes if their client isn’t meeting intended short-term saving goals.

The end of the holiday season also means a new year! It is a time for you to evaluate how you are managing your money for the start of the new year, as well as what financial goals and resolutions you aim to achieve in the coming year. A financial advisor, such as those within Zoe Financial’s network, will understand your unique financial situation, help set priorities, create a budget, save for retirement and other life goals.

A financial advisor on your team year-round means having a holiday spending plan that is incorporated into your broader financial plan. Ultimately, the key to successfully managing your holiday spending is to integrate it into your year-round budget and lifelong financial goals.

Manage Holiday Spending: Top Four Tips

Feeling stressed about your spending this holiday season? Here are four tips to help you best manage your budget and expenses. Published Dec. 1, 2020

1. Set a Holiday Budget

2. Keep Track of Expenses

3. Plan Ahead for Holiday Spending

4. Build Better Spending Habits

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