As we welcome another holiday season, does “The Most Wonderful Time of the Year” mean going into debt? In a recent survey, seven in 10 Americans say they typically go over budget and more than half say they feel pressure to overspend during the holiday season.1 If most Americans struggle with budgeting during the holidays, can college students be expected to be any different? The answer is yes, and the critical thinking skills students are learning to master will help make the season (financially) merrier.
College students who have a spending plan and adhere to a budget already have the resources they need to navigate the holiday spending season, and some reminders will help. For students who have not yet adapted to a spending plan — now is the time.
Keep in mind, a budget or a spending plan does not mean that the Grinch or Scrooge have come to take all the fun away. Actually, budgeting and following a few key tips will result in students having more confidence to know what they can buy and how much they can spend. It will also help turn the tables, so students are in the driver’s seat rather than the banks or credit card companies. The holidays go from feeling like a pressure-cooker to something a little more, “Fa la la la la.”
A common-sense goal for every student ready to take command of their spending is to have more income than expenses. But what happens during the holidays when there are more parties and social gatherings, gift purchases, and likely travel expenses?
The first step is to put a spending plan in place. That can be an easy step for savvy students who have a smartphone or access to a computer. MOSAIEC’s website has plenty of budgeting and planning resources available and there are also free budgeting apps, such as Vertex42, Mint Budget, and Honey Due designed for couples, that can be downloaded to a smartphone.
When students are consistent with tracking their expenses, they know where their money is going. This step is often overlooked but is essential to a successful spending plan. Students must know where their money is going to plan how to spend — and save. For example, a student who buys a large latte five days a week may decide that cutting down to a medium size or making the purchase less frequently will help when there are gifts to be bought, or things to save for. Consistently tracking income and expenses provides a roadmap to a successful plan.
Five Tips to Successful Holiday Budgeting
- Plan Ahead
Categorize expenses and label necessities and basic needs, prioritize the holiday shopping and spending you would like to do, and then look for areas to cut back during this time; for example, eating out or buying more expensive coffee every morning. Look for coupons or deals on items you plan to purchase during the holidays to try to get the best price.
- Keep it Real
It does not make sense to purchase an expensive gift or multiple gifts if that means not paying rent or having money for groceries. A card or a DIY gift often has more meaning. Offering to walk someone’s dog or cleaning their apartment for free may cost time but won’t deflate your bank account and is a meaningful gift that can’t be bought.
- Use Your Phone
Comparison shop from your phone. Many stores will honor a lower price when shown proof. Savvy students understand how to use their phone to lower costs and find the best deals or free shipping, among other perks.
- Don’t Wait
Shopping early allows more time to comparison shop for best prices and deals. Last-minute shoppers are typically rushed, stressed, and tend to overspend.
- Make Your List & Check it Twice (or Three Times)
Decide your budget for holiday gifts and entertainment and use your critical thinking skills to decide if you can afford it. Consider leaving your credit card at home and shopping with cash to make sure you aren’t making purchases that you cannot afford.
When it comes to spending, more is not always merrier. Shop smart this holiday season with these budget-proof tips.
I am a Financial Coach for college students and parents. I am an Accredited Financial Counselor (AFC®) and received my BBA in Management from Texas State University. I help students understand their financial aid and help them develop a plan to achieve their educational and financial goals. I was a first-generation college student, so I have a personal understanding of some of the struggles students face.
Working in the financial aid industry for 13 years has given me the opportunity to work with students at different points in their life from starting college to graduating and finding a job — all the way through helping them repay their student loans and save for the future.
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