Prepare for the financial side of the holidays [Personal Finance]

The holidays can push budgets past their limit as people do more entertaining, attend more events, dine out and participate in gift exchanges. Whether you’re gathering in person or celebrating at a distance this year, it will be tempting to overspend. Here are some tips to help you plan for a less financially hectic 2021 holiday season.

Create a holiday budget

The last month of the year offers many opportunities to splurge. Prevent unfettered spending by setting a “do-not-exceed” dollar amount for holiday-related expenses. Include all purchases tied to the season, from gift giving to refreshing your holiday wardrobe, buying decorations, entertaining and more.

Track your expenses

A budget is only useful when you track your expenses against it. Keep receipts for purchases and tally expenses at the end of each shopping excursion. Check your totals to make sure you’re not exceeding your budget — and are prepared to make returns if you have.

Manage your expectations

The COVID-19 pandemic continues to affect global supply chains, causing disruptions in many different and surprising product categories. Merchants of all sizes will have product shortages and may offer less merchandise choice overall. Prices will be higher too, driven by increased demand, inventory shortages and higher than normal inflation. And don’t expect fire sales as we get closer to the holidays. Retailers will be unlikely to discount product that’s flying off the shelves.

Shop early

More than ever, this year you’ll want to give yourself plenty of time to do your holiday shopping. Both brick and mortar and online stores will be affected by the supply chain challenges. Be flexible. You might have to spend more time looking for what you want. You may need to switch gears if you can’t fulfill your initial wish list. And if you need to ship your gifts, keep in mind that the holidays always cause shipping delays, but this season the slowdown is predicted to be greater than usual.

Plan for increased shipping costs

In addition to inflated prices on general merchandise, shipping costs are spiking upward as well. The U.S. Postal Service has announced price hikes, and other major shipping carriers are also raising their prices to counteract higher oil prices and staffing shortages.

Give differently

If the gifts you want to buy are in short supply or “things” aren’t your thing, consider ticking off your gift list by giving experiences. Local restaurants are eager to make up for months of lost business. Likewise, theaters and sporting events are finally opening up and need to fill seats that have been empty too long. You could also consider giving financial gifts to your loved ones such as a partially funded savings account, Roth IRA, savings bond or an appointment with a financial advisor. And finally, charitable donations are becoming more popular as holiday gifts, particularly if the non-profit is meaningful to the recipient.

Bronwyn Martin is a financial advisor and chartered financial consultant  with Martin’s Financial Consulting Group, a financial wealth advisory practice of Ameriprise Financial Services, LLC. in Kennett Square, and Havre de Grace, Md. She specializes in two fee-based financial planning and asset management strategies and has been in practice for more than 21 years. To contact her visit

Christopher Lewis

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