Presents for relatives. Sales. Gift-giving to friends. Sales. Toys for kids. Sales.
On average, Americans estimate that they will spend $830 on holiday gifts in 2015. But that’s just for presents. And it’s just a good guess.
Are these budgets accurate for seasonal expenses? The answer is, often, not so much. What are people missing?
- Gift Glut
It’s easy to get caught up in holiday giving and start adding folks to the gift list. But the cost of extra presents — even small ones — can add up quickly and blow your budget.
One way to keep spending under control is to create a contingency fund for unanticipated expenses. Better to be safe than sorry when those credit card bills start rolling in.
- Wrapping Rates
Speaking of presents, you’re probably not going to just hand them over in paper bags. If you’re lucky, you have leftover wrapping paper. Or maybe you bought gift bags during last year’s post-holiday sales.
If not, you’re going to need to do something, or your presents will be naked. Wrapping materials can be expensive. A lot of shoppers buy them at the spur of the moment…and budgets take another hit.
- Postage Payments
Still speaking of presents, how are you going to get them into the hands of your loved ones? It’s wonderful to give gifts face-to-face, but if everyone isn’t home for the holidays, you’ll have some shipping expenses.
Postage isn’t cheap, especially if packages are heavy or going long distances. You may have budgeted $50 for your niece’s gift, but did you consider how you’re going to get it cross- country?
It’s also easy to forget about postage for holiday cards. You may spend a lot of time finding ones with the perfect picture and sentiment…but you won’t be hand-delivering them. If you have a long card list, the cost of those attractive holiday-themed stamps adds up quickly.
And what about shipping for online purchases? The holiday time is competitive for retailers, so many have postage-free promotions. Don’t get caught paying almost as much for shipping as you do for the presents themselves!
- Food Finances
Unless you’re planning on grilled cheese sandwiches and carrot sticks for holiday dinner, chances are your grocery bill will be higher than usual. Since you’re used to buying food, it’s easy to forget that special holiday treats are pricier, especially if you’re entertaining.
A big roast turkey, smoked ham or leg of lamb dinner for all your relatives is downright expensive. If you have friends over for holiday get-togethers, costs continue to soar. And it’s not just food prices. Spiked eggnog or festive cocktails can hit holiday budgets as hard as they hit partiers.
- Credit Card Costs
Even consumers who create holiday budgets often use credit cards for purchases. That’s fine if you pay the bills off quickly. But even with good intentions, that often doesn’t happen.
Then you’re on the line for the presents plus interest charges. In 2015, the average interest rate for credit cards is about 15 percent. Those are easily forgotten but quickly accruing holiday costs. The joy of holiday giving quickly wanes with the onset of January credit card bills.
- Personal Purchases
You feel so generous at holiday time. Gifts for family, friends, teachers, service providers, charities…but what about you?
When you’re shopping for others, it’s easy to find items that you love. Chances are the prices are really good, too. But it’s also a good bet that you didn’t include personal spending in your holiday budget. That fluffy angora scarf was a great deal. It’ll keep you warm, but it’ll also wreck havoc on your budget.
Some people deal with the onslaught of seasonal sales by volunteering time to charitable organizations. You give to others without spending a penny and still get that warm holiday glow.
To keep from going overboard, holiday shoppers can create budgets and stick to them. But spending plans aren’t terribly useful if they’re incomplete.
When you develop your budget, take a look at the entire holiday season and try to include all possibilities. Save that list for next year so you’ll have a starting point. If you keep at it, you should eventually have a budget that encompasses all your holiday joy.