As the upcoming holidays bring their pomp and circumstance with festivities and gift giving, excessive spending during this time can have long term financial effects well after the season has ended.
And as families and friends plan to gather after a period of isolation during the COVID-19 pandemic, a recent study from money.com stated that Americans will most likely spend more for just that reason.
As a result, they said that Americans expect to spend 34% more than they did in 2020. Therefore, it is important to be mindful of cash outflows that are in significant excess of incoming funds.
In the past few months as Americans have begun to travel and dine out more than in recent months, the costs associated with these pleasures have also risen. This includes the cost of gas, groceries, rental cars and dinners at restaurants.
To avoid the after-holiday shock, the study suggests a few tips to become a thrifty spender during the holidays. The first tip is to make sure that you maintain an emergency fund regardless of the gifts purchased.
Having this resource in place can help mitigate unexpected circumstances that often catch many people in “off-guard” when they occur. Continuously making room in your budget in spite of the holiday season will help create financial strength throughout the remainder of the year.
Setting aside a holiday fund early in the year by designating small amounts weekly is also another way to spend wisely, according to a report just last month from cnbc.com.
This amount can be saved in small increments with as little as $5 to $10 per week. Also, by planning ahead, holiday gift-givers can often avoid paying higher prices and expedited shipping costs.