Financial Planning for the Holiday Season

There is a chill in the air these days and in some parts of the country, it’s beginning to look a lot like Christmas and the holiday season! Thanksgiving is just around the corner, and before you know it, we’ll be decorating our Christmas trees, lighting our Menorahs, and spreading holiday cheer in general.

With the holiday season comes a lot of extra spending that we just don’t see during other parts of the year.  From heading out of town to see the in-laws (or to get away from them??) to planning and executing the perfect family Christmas dinner, budging for these extra expenses will go a long way in securing your financial health and keeping you sane during an otherwise stressful time of year.

Planning for Holiday Vacations

A lot of people travel over the holidays.  Going to Grandma’s house to be with the entire family this year?  Maybe you’re headed some place tropical to get away from the cold and blustery snow of home. Regardless of where you go, there is a lot that you need to plan in advance so you’re not seeing red on your credit card by the end of the year.

Before you head out anywhere, you’ll need to budget and allocate your finances appropriately.  How are you getting there?  Are you flying? Think about how much it will cost to park at the airport or take a shuttle or taxi in (as well as to your destination). How much will the flights cost? If you’re not staying with friends or family, you’ll need to factor in hotel, food, and entertainment costs. Even if you don’t have a solid itinerary, you still know you need to sleep somewhere and eat three times per day, so make some good estimates.

If you have been using a Discover it Miles card and earning 1.5x Miles for every dollar you spent, you can use those towards your holiday travel purchases to help with the cost.

Hosting Holiday Meals

Maybe you’re staying at home this year and everyone is coming to visit you! Now you don’t have to worry about flights, hotels, and other travel expenses, but now you have a new list of items to take into account.  What are you planning to cook over the holidays?  Plan your meals and use the ingredient list from the recipes to calculate how much it will cost for you to cook for whoever is coming to town to visit. Don’t forget about the wine or other adult beverages if you or your family enjoy such things. These items can add up, so try to find deals on multiple packs or bottles and try to pick brands that don’t cost an arm and a leg.

One way to save a little bit of money here would be to offer to “co-host” the holiday meals with another friend or family member.  Maybe one of you can purchase the food, while the other purchases the beverages.  Alternatively, if you have a lot of people coming from in town, consider hosting a potluck-style dinner where you provide the main dish while everyone else brings their favorite side dish and/or bottle of wine.

Budgeting for Gifts

Of course, what’s the holiday season without gifts? The more people you have in your family and close circle of friends, the more expensive gifts can become.  One way to avoid spending too much on gifts is to limit the amount that you spend per person.  Set a strict limit of $10-$20 (or more or less, depending upon your own financial abilities) per person, and do not go over that limit when purchasing gifts for each person.  Alternatively, if you have family or friends who are couples, consider purchasing just one gift for the two of them to share.

Holidays should be about more than just material gifts, so don’t feel obligated to “go all out” and buy everyone you know the most expensive thing you can find.

Check Your Credit History

Finally, with all these extra purchases this holiday season, you’re going to want to stay on top of your credit and make sure your credit history doesn’t take a big hit.  You want to budget all of your holiday spending appropriately so that you’re able to stay on top of paying your bills, and to make sure your credit score does not suffer.

Thankfully, the folks at Discover offer your FICO® Credit Score for free  on all monthly statements..

The most important thing this holiday season is to give thanks for all that you have, all your friends, family, and loved ones. It’s the company of friends and family that matter most, and everything else is just not worth hurting your credit score and sending you into debt.  Budget your holiday finances appropriately, and stay on top of your FICO® Credit Score  by checking it on your monthly statement or online.

Happy Holidays, all!

Disclosure: I am a paid brand Blogger for Discover Financial Services My views are my own and do not necessarily reflect the views of Discover Financial Services and its affiliates.