It’s the holiday season again – it’s hard to believe how quickly it comes around each year! Oftentimes waiting until December to start planning holiday festivities, including meals and gifts, is too late. It’s easy to lose control of your spending during this time of year. Here are some ideas for designing your holiday budget to avoid financial pitfalls that could put you in a difficult situation when you want to apply for a mortgage in the New Year. Remember, the earlier you start planning the better!
Consider a Minimalist Holiday
With economic inflation a current concern, taking a step back this holiday season is understandable. Gifts, décor, and food don’t have to be extravagant to be meaningful. Consider cutting back on the extras this year and focusing on what really matters: time spent with those you love. Some tips from the website Becoming Minimalist include:
- Don’t worry about the way it’s always been done.
- Do what you can with what you have.
- Don’t feel bad about not having the holiday season advertising tells you to have.
Plan (and stick to!) a Grocery Budget
Many of us express our love through food. It is fun to cook enormous meals for our family or friends to celebrate the season. Sharing a meal is an incredible way to get together and enjoy each other’s company during the holidays. However, with grocery prices higher than ever this year, it might be helpful to consider making a strict budget and list ahead of your shopping trip.
Start by making a holiday meal plan and writing down your shopping list. Search online or in print ads for coupons or shop deals – sometimes it’s worth it to stop at a few different stores for the best deal. Plan to have leftovers to feed you and your family after the celebration, and make sure to have plenty of freezer-safe containers on-hand. Or, if you want to keep the overall cost down, try hosting a potluck! Encourage everyone invited to bring a dish of their choosing. Make sure you assign courses, or you might have too many of one item. This is also a great way for others to share their family recipes and traditions.
Choose to Gift Experiences Over Stuff
Another tip from the Becoming Minimalist blog is to choose experiences over material things. A gift doesn’t always have to come in a box with a tag, it can be an activity you do together. Consider spending within your budget to participate in local activities like theater or music, or you can choose to do something without cost, like go for a hike or visit a historical place in your area. Other great ideas include museum or zoo passes, movie tickets, or gift cards. If you embrace minimalism, experiential gifts can also be consumables. Treats or drinks are a great way to give a gift that won’t become cluttered.
Tips to Avoid Financial Pitfalls
As an independent mortgage lender, I want to mention some financial pitfalls you could run into during the holidays that could potentially affect your ability to secure a home loan next year. I probably don’t need to say it – but buying that new car and parking it in your driveway with a giant red bow may not be the best financial decision. Other financial pitfalls include:
- Significant increases in credit usage
- Missed credit payments
- Opening new credit cards
If you plan to buy a home in 2023, it’s important to be thoughtful regarding your spending this holiday season.
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What are your go-to holiday budgeting tips?
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