The holidays happen at the same time every year, but somehow they always seem to sneak up on us. By following some simple strategies, you can plan and prepare early so that you can minimize the stress and enjoy this wonderful time of the year.

Preparation doesn’t just consist of starting to set money aside early to save up for the most expensive time of the year. In fact, 65% of Americans are already setting a holiday budget. However, 77% of those who set a budget also plan to exceed that holiday budget. (1) So how can you avoid this pitfall and set yourself up for success? Here is a framework to get started and begin the process:

  1. Write down a list of ALL your anticipated holiday expenses – usually gifts are the first thing that come to mind when thinking about holiday spending. And rightfully so considering Americans spent an average of $967.13 on gifts for friends and loved ones in 2017 (the highest amount since 2007, we may add). (2) To account for your gift giving, write down each name of who you plan to give a gift to. This typically includes your spouse/children, immediate/extended family, pets and friends. Don’t forget those who you plan to give a small gift to – perhaps that list includes teachers, coaches, co-workers, hairdressers, etc. Also factor in additional costs for your cards, gift bags and gift-wrapping too!

    Next, think through your non-gift expenses. Do you plan an annual Ugly Sweater Party each year? Or do you plan on meeting up with particular friends for dinner or happy hour this holiday season? Do you plan on bringing desserts or appetizers to any holiday parties? What about any planned holiday travel? Provide estimated costs for each of these items in your expense list.

    In addition to gifts, food and travel, we also tend to decorate more than usual during this time of the year. Don’t forget to factor in costs for items such as lights, trees, candles, house décor, etc. Anything that goes above and beyond your average spending should be accounted for in your holiday expense list. The key is to keep it detailed and capture all your estimated expenses so you can plan and budget accordingly.

  2. Write down your available budget – this should include any money you have saved up for this holiday season. To ensure you have budget set aside for the holidays, start a dedicated savings account early in the year and begin setting aside money each month. Even just a small amount can add up over several months and decrease the hit of all the holiday expenses at once.

  3. Assign your budget – earmark money to each of your items in the list of expenses identified above. This number should not go over what you have identified as your available budget in step 2. If it does, consider where you can earn extra money to make up for the difference (see below for some ideas).

  4. Develop a plan – now that you have your game plan for spending, you can map out your plan of attack. Create a shopping list of the stores you need to go to and when you will go, perhaps even some items you can buy online to take advantage of online coupons or Black Friday deals. Give yourself plenty of time to complete your action items so you don’t feel rushed as the holidays get closer. Don’t forget to factor in days to wrap, get organized and take care of yourself too (perhaps a dedicated day to work out, take a hike or cook a healthy meal at home).

  5. Monitor and Track – now that you have implemented your plan, it’s time to track your spending. Include an additional area in your budget for actual expenses next to your anticipated cost from step 1. At the end of the year, do a reconciliation exercise to see where you went over, under and met your budget. Take notes on what worked well and what didn’t so you can revisit it again next year. Then before you know it, holidays will be down to a system and you relax knowing you have it all under control and within budget.

Lucky for you, ISU Credit Union offers an amazing person finacial management tool called MoneyDesktop. Be sure to leverage the program to help you save in ways yo never thought was possible! 

One of the easiest and most common ways to get off track in your holiday framework is to underbudget and overspend. This is why there is such a large discrepancy between those who make a budget and those who realistically stick to it. Costs can quickly creep up over your allocated budget, or you may simply just not have enough savings set aside to account for the anticipated expenses. In order to increase your cash flow coming in BEFORE spending it on holiday expenses, you may consider getting a temporary side job.

Here are five ways you can make some extra cash to minimize the gap:

  • Find Freelance Work: the barriers to get started as a freelancer are minimal these days with so many websites matching services to business needs. Whether you can design, write or help put furniture together, simply search on sites such as Upwork, Fiverr or Task Rabbit and apply for jobs.
  • Sell Your Crafts: although crafting is a fun hobby, it can also bring in extra cash. Consider selling your crafts, whether it be candles, fashion accessories or holiday decorations on sites such as Etsy or eBay.
  • Pet Sit: since many people travel and are on the go during the holidays, consider lending a helping hand to others furry friends. Create a profile on pet-sitting sites such as DogVacay or Sittercity. If you don’t have the space to host pets overnight, you can sign up to dog walk or just stop in for a visit during the day.
  • Get a Side Job: many stores are looking for help as shopping ramps up and many companies host parties for the holidays. Look for seasonal retail jobs or catering opportunities that you can work at during nights or on weekends.
  • Rent Out a Room: if you have the space in your home, why not list a spare room to be rented for some easy extra money? Sites such as Airbnb or Wimdu make it simple and reliable to create a profile and rent out an extra room or apartment. You can even rent your own room if you’ll be traveling or gone for the holidays.

ISU Credit Union offers a wide varity of savings accounts that meet your every need. Plus, we also have some helpful calculators that can help you see the results of your savngs goals.

Although the above side jobs may require long hours and dedication through the end of the year, it’s well worth it to avoid a post-holiday financial hangover. After all, you do not want to join the average American who racks up over $1,000 of holiday debt. (3) Instead, with the right planning and course of action, you can enjoy the holidays and start the New Year off on the right foot.


1 https://www.usatoday.com/story/money/personalfinance/2017/10/12/most-americans-set-then-exceed-a-holiday-budget/106520828/
2 https://www.investopedia.com/financial-edge/1112/average-cost-of-an-american-christmas.aspx
3 https://www.cnbc.com/2018/01/02/americans-racked-up-more-than-1000-in-holiday-debt.html