How to Avoid Overspending This Holiday Season, Especially You, Millennials

It may be the most wonderful time of the year, but it can also be the most expensive.

December is the most expensive month to travel, and for many, it’s the most costly month of the year.

Holiday vacations and excursions, parties, cards, gifts and even clothing can add up quickly.

According to a recent story from CNBC, 41 percent of millennials plan to spend more this holiday season than last, an average of $861.

That’s compared to the national average holiday spending, which is $819 across a group divided into parents, millennials and those with $100,000+ incomes. 

How do millennials spend for the holidays, and how is it different from other generations?

First, we know millennials are more likely to value travel and experiences over material items, and Christmastime is no exception. Keep in mind that while December is the most expensive month for travel, January is the cheapest. Perhaps an excuse to escape the post-holiday blues!

Here’s a surprising statistic: Millennials are more likely than baby boomers to set and stick to a budget, according to TD Ameritrade’s Next Generation Research report.

But when Credible.com, a student loan refinancing website, surveyed a group of 500 millennials with credit card debt, they found nearly half had no budget in place for the holiday season.

By simply creating a spending plan, you’re more likely to follow through and keep your hard-earned money in your saving account through the new year.

Here are some suggestions to avoid overspending around the holidays:

• Use cash to become more aware of your spending. If you’ve been saving extra from a side hustle, designate that money towards gifts and holiday outings.
• If you must use credit cards, pay attention to cashback bonus opportunities in categories where you might be doing your holiday shopping.
• Take advantage of sales, but don’t go overboard. You might find a great deal on a TV for your mother, but don’t get sidetracked by the sale on that expensive pair of shoes.
• Instead of paying for a pricey holiday photo shoot and custom Christmas cards, create your own cards through low-priced sites like Snapfish or at Costco’s Photo Center, using photos taken on your smartphone throughout the year.
• Instead of hosting a huge holiday party, plan a potluck and have each of your friends bring their favorite dish.
• Set a limit for holiday get-togethers with friends, like one lunch and one dinner per week. Or, spend time volunteering together for a local nonprofit instead.
• Need a couple new outfits for the holidays? Add it to your holiday budget to avoid mindless shopping for yourself when buying gifts for others.
• When it comes to budgeting for the holidays, I also have a few tips and tricks. If you are a diligent budgeter and know what you have spent in past years during the holiday season, go ahead and budget that much ahead of time. Using this method, you’ll be able to either put aside extra money each month throughout the year or cut down other areas of your budget to compensate for this increase in spending at the end of the year.

Another tip is to limit how much you spend per person. Start by making a list of who you need to buy gifts for and what your total budget is. Then either allocate an equal amount to each or set different amounts based on who you are giving to.

If you can plan far enough in advance, you may even consider buying presents for those on your list throughout the year. This helps spread out the spending and alleviates the pressure on the November and December budgets.

The holidays are already a stressful time of the year and planning ahead can save you so much headache.

Jennifer Pagliara is a senior vice president and financial adviser with CapWealth and a proud member of the Millennial generation. Her column speaks to her peers and anyone else that wants to get ahead financially.

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