7 Ways to Start Preparing for the Holiday Shopping Pinch

Like it or not, the holidays are around the corner, and with that comes the spending to go along with it. If you’re among those who are worried about busting your budget during this season, you’re not alone. That, and there’s no need to overspend or go into debt–you can still enjoy this time of the year without needing a ton of cash.

Here are a few ways to start preparing for the holiday season pinch.

1. Make a Game Plan

You won’t know what you’ll need or want until you write it all down. Doing so can also help keep a lid on everyone’s desire to go all out during the holidays–especially helpful if you went into debt last year. You can look at last year’s bank account and credit card statements to see what you’ve spent in the past, but it might not be helpful if you’ve gone a little crazy in the past.

Instead, sit your family down and write down a wish list–include presents, trips and events you want to attend. You’ll also want to have conversations about who you want to buy presents for, whether you’ll host parties, and whether you’ll need to purchase food for holiday events.

Then be honest about everything you want to do. Does it look like you can go on a trip, host a holiday extravaganza and buy presents for all your neighbors and kids’ classmates? If so, great. If not, this is the perfect time to talk about priorities and what items you can cut out.

2. Come Up With a Budget

Once you’ve come up with a list, then it’s time to work out a budget–will you spend what you can save up or will you take out a loan? Whatever your choice (since it’s a personal one), work out a plan on how you’ll save up or have enough room in the budget to make monthly payments toward a loan.

Before crunching numbers, make sure to include every possible item. This can include wrapping paper, an increased transportation budget and decorations around the house. As a family, look up these items (including presents) online or at stores to determine approximate costs to figure out how much you can spend.

Once you’ve determined a number, break it down–what’s the maximum you want to spend on wrapping paper versus decorations? Consider posting this budget everywhere for your entire family to see to remind each other what you’ve agreed to spend this holiday season. By the way, create a list of items you’re only going to buy so you’ll stick to it.

3. Create a Sinking Fund

A sinking fund is a separate line item in your budget where you set aside money specifically earmarked for a short-term goal, the holidays included. The idea is to determine your overall savings goal–say $800–and divide that by the number of months you want to reach the goal by. Each month, you set aside that amount. For example, if you want to save $800 in four months, then you need to set aside $200 each month if you want to meet that goal.

Creating a sinking fund is a great way to make sure you have enough cash for the holidays. Even if you can’t save a ton of money in time to make your purchases, it’s better than nothing. If you’re tempted to spend the cash you have in your savings account, consider opening another one (many online banks let you open multiple accounts) so you know it’s earmarked for a specific purpose.

Now that you have a budget for your holiday spending, here are some ways to save even more money.

4. Take Advantage of Cash Back Portals

A great to save money when shopping online is to use cashback portals. Websites like Rakuten (formerly Ebates) can help you get a percentage back on purchases from participating retailers at no extra cost to you. There are also other browser extensions like Honey that search online for promo codes and online coupons to help you nab the best possible deal.

Besides, shopping online tends to be more convenient–no need to drive anywhere or wait in long lines–so saving money is an added bonus.

5. Consider Online For Gifts For Distant Friends and Relatives

Ordering online is also a great option if you’re sending presents to friends and family members who live far away. That’s because you can save money on shipping costs. Many online retailers also offer the option of wrapping your purchase before sending it off for a few extra dollars at checkout.

If an online retailer offers free shipping or you have a membership like Amazon Prime, it’s worth looking into it. Make sure to do some calculations to make sure that there aren’t any markups that negates the cost of shipping it yourself instead.

6. Use Rewards Credit Cards

One caveat before diving into this topic–if you’re someone who isn’t a responsible credit card user, then skip this part. Not being able to pay off your balance each month tends to negate the rewards you’ll earn and you’re putting yourself at risk of getting into debt.

Now that that’s out of the way, rewards credit cards can help you save big bucks when used responsibly. Depending on your goals, you can earn points or miles towards free flights and travel or there are rewards cards that offer a certain amount of cashback on eligible purchases.

For example, if you’re saving up for a trip, you can open a travel rewards credit card and earn enough points for a free or heavily discounted trip. Or you rather save money on party decorations, so you find a cashback card that offers bonus rewards for purchases at office supply stores.

Whichever card you choose, make sure you understand the terms and conditions, including how to meet requirements for any signup bonuses and annual fees.

7. Consider Homemade Gifts or Get Creative With Presents

In many cases you don’t need to buy presents during the holiday season–friends and family care about spending more time with you. Consider homemade gifts if your budget is stretched too thin. Maybe your best friend loves your chocolate chip cookies or your aunt loves it when you take her out for coffee down the street. You get to show people you care and it doesn’t put a big dent in your wallet.

Other ways to get creative with presents is to gift experiences. For example, instead of presents, invite friends and family over for a nice meal–it can cost a lot but tends to be less than a bunch of presents. Or invite friends over for an at-home spa day.

No matter your budget during the holiday season, doing a little preparation and being honest with how much you can spend is useful. That way, instead of worrying about how you’ll pay for it all, you can relax and be present with family and friends.