In 2019, the average person spent around $1,050 on their Christmas shopping budget. With the current economic state, it’s no surprise that average will likely decrease during the 2020 holiday season.
Now is the time you might be thinking about how you’re going to budget for Christmas this year. Before you max out your credit cards on impulse buys, you should consider a few things.
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How Much Should I Budget For Buying Gifts?
When it comes to the holidays, it’s easy to get caught up in the luster and shop without budgeting in mind. First step? Clearly laying out your budget. Calculate what you can afford after the necessities, such as mortgage and utilities, are taken care of. If you find that there’s no money left over after everything is paid, look to see where you can cut back or how you can make more money.
At the end of the day, Christmas isn’t about presents, it’s about spending time with your loved ones. Your family isn’t going to care if you bought them gifts if you can’t pay your bills.
How Much To Spend on Christmas Gifts Per Person?
Keep everyone happy by spending the same amount on everyone.Take your overall budget and split it by the amount of people you have to spend on. Whether that’s $10 or $100 per person, you’ll have a limit and it’ll prevent you from overspending.
Should I Have A Separate Christmas Savings Account?
While a separate Christmas savings account isn’t absolutely necessary, using the perks from a new account could help. Some banks offer a bonus sign up incentive for opening up a new account with them. That extra money could cover a portion of your Christmas budget.
If you’re tempted to use your holiday money if it’s attached to your primary checking account, open a new account at another bank or a managed investment account with MoneyLion. You can externally direct deposit money in there as often or as little as you want. Throughout the year, let that money build up and only use this account as an emergency and holiday fund.
Should I Get A Christmas Loan?
This time of year consumers fall for the payday loan trap. Money is tight, the holidays are near and worrying about the future debt falls low on the list of priorities. After the dust settles, you’re left with mountains of wrapping paper and major debt.
Don’t be fooled by these predatory loans masking themselves as “Christmas Loans”. Plain and simple, they’re the same ole sky high interest loans (triple digits!) that are easy to get but hard to pay back.
Is a Holiday Credit Card Offer Worth It?
During the holidays, it seems like the credit card offers are being shoved in your face everywhere you go. Every time you purchase anything you’re being offered a new shiny card and the “sign up now and you’ll earn this” pitch. Two words – buyer beware!
Credit card rewards like cash back, bonus points and gift cards are beneficial – sometimes. Getting a new credit card from a retail store or company you rarely use isn’t a smart financial move.
If the only time you’d use it is for Christmas or on one transaction, we highly recommend you don’t. You’ll waste an inquiry on your credit score and you won’t use it enough in order to benefit from the rewards program. Not to mention the astronomically high annual interest rates.
If you’re in need of quick cash, consider getting an advance from Instacash. Instantly borrow up to $250 interest-free without a credit check right from your phone day or night. Below, we’ve used a few examples to showcase the cost between borrowing from a credit card vs. Instacash.
|Initial Amount Borrowed||Instacash||Credit Card|
*Approximate total credit card balance owed is based on 22% interest rate paying $15 minimum payments over 21 months.
*Instacash repayment amounts are reflective of on-time payments.
Budgeting For Christmas Gifts
When it comes to gifting on a tight budget, DIY is the way to go. Not only will you save tons of money, but your presents are made with love. Or consider giving the gift of quality time through experiences for the whole family. Pinterest has tons of ideas of homemade, experience or cheap presents that everyone will love!
Preparing and Budgeting for Christmas
Preparing for the holidays should be filled with joy, not stress. Set yourself up for success and plan ahead. Budgeting isn’t just writing down the amount you want to spend, rather overlooking your total household expenses and finding the amount you can afford.
And if you can’t afford everything right now, MoneyLion’s got your back! Use 0% Instacash advances for all your last-minute gift-giving needs. And earn cashback if you spend it with a RoarMoney account! Follow these easy steps to a debt-free and peaceful holiday season!