Some people throw around the word ‘frugal’ like it’s a bad thing.
But the true key to long term wealth is saving money! The old adage ‘a penny saved is a penny earned’ is a wise one. A recent study of millionaires found that 78% of millionaires said they were able to build their wealth because of financial discipline and money saving. That’s a lot of pennies saved!
Now – not all of us are millionaires (myself included!) But taking a hard look at spending habits, especially as we near the holidays, is essential to making sure you have money left in the bank to buy gifts and the things you need – without having a huge pile of debt in the new year.
Here are 5 tips for cutting costs for the holidays so you aren’t hurting in the new year!
- Feeling (pot)lucky? – We host Thanksgiving dinner every year. With usually 20-30 guests, it is a LOT of food. Which means the costs add up. Every year, we ask each family to bring one to two dishes. We make the turkey, the mashed potatoes, and buy some wine and beer. Everyone fills in the rest. It makes it a lot of fun trying all the different dishes people cook up every year. And it saves us a lot of money!
- Have a plan in store – Going into Target or any other big box store leading up to the holidays can be daunting. There are products in every aisle saying BUY ME BUY ME! For that reason, I usually prefer to do my shopping online. But when I have to go to the store, I go in with a plan. If I know exactly what I am getting, I will order ahead and pick it up at the front. If I want to browse, I will have a specific plan of the types of products and the price range of the gift I want to buy.
- Stick to cash – It can also be really helpful to go into the holidays with a cash budget. My grandfather was a big believer in the ‘envelopes’ method. An envelope for gifts, where you put the cash in the envelope for your gift budget for the year, and you have to make it work with that cash. Try putting aside envelopes for everything holiday related. If you avoid going to the credit card, you will be a big step ahead with saving!
- Don’t go overboard with gifting – I have a kid and a family and I absolutely LOVE buying gifts for everyone. So I get it. It’s hard not to spoil the people you love for the holidays. But… think about the gifts you bought your spouse or your kids last year. How many of them do they still use? What I try to do is get everyone one really nice gift that will last. Something high quality. And then one or two fun little gifts. People remember the high quality gifts that last more, and end up throwing most of the other stuff away.
- Reuse, Reuse, Reuse – I am a big believer in recycling products. I save wrapping paper for gosh sakes! Old gift bags, ribbons, bows, wrapping paper. A reusable Christmas tree (sorry tree farms!) Heck I even recycle gifts. If my kids get something from Aunt Rita and don’t use it, that’s getting re-gifted to someone next year!