Even if you've taken care to masterfully perfect your holiday budget, you may find that some unplanned costs still sneak up on you. From snacks gobbled up on long car rides to grandma's house to foot after foot of gorgeous wrapping paper that makes your presents presentable, make sure you account for every single expense this season. The more control you have over your spending throughout these festive months, the jollier your holidays will be.
There's something deeply satisfying about having perfectly wrapped presents nestled under the fragrant pines of your Christmas tree. Unfortunately, wrapping paper, tape, bows and ribbons don't come free. "When it comes to gift-buying, the cost of gift wrap quickly adds up," notes Charles Tran, founder of CreditDonkey.com, a credit card comparison and financial education website. "In fact, Americans spend almost $3 billion on gift wrap and related accessories."
Party Hosting Expenses
"Most people don't budget for parties," says Neal Frankle, a certified financial planner based in Los Angeles. "They go to the store with a list of items to purchase and spend what they spend." Frankle says that a better approach is to create a budget before you ever come up with a shopping list. Working within the confines of a party planning budget will keep your spending at bay and force you to be more thoughtful about what you're placing in your cart.
Credit Card Interest
Charging all your gifts to credit card may make sense, especially if you earn points or a percentage back for using it. However, not paying off your credit card in full at the end of the month makes you subject to interest. "A $700 holiday gift budget can take over four years to pay off if you only pay the minimum on a credit card," warns Tran. It could also cost you up to $200 more in interest charges. To prevent incurred interest charges, only spend within your financial means.
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Airline Baggage Fees
If you're flying, factor the cost of baggage fees into your ticket. Sometimes, opting for the more expensive airline ticket makes sense if they offer a free baggage promotion. Another sneaky expense is baggage penalty fees, which are incurred if you go over the per item weight or size limit. Read through your airline's rules before packing a bag and, if you can, travel lightly.
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Road Trip Food and Entertainment
"When people travel, they always think about travel and lodging, but many forget about food and entertainment costs," says Frankle. "The best way to make sure you don't wreck your budget is to bring your own food if possible or shop at supermarkets along the way and cut back on restaurants as much as possible." Recall the spending that took place on any previous road trips and budget accordingly to prevent any fiscal surprises.
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If you're driving a long distance to a relative's house, Frankle says to take car depreciation into account. For example, engines only have so many miles on them and tires wear out with every city limit you pass. "If you travel 1000 miles in your car this holiday season, that means you'll have to replace the car 1000 miles sooner," explains Frankle. "That equates to about a month's wear and tear on your car, and that could set you back $300 to $500 dollars right there."
Shipping is an expense people often forget about when creating their holiday budgets, but it's one that adds up very quickly. "Add in the cost of shipping, which seems to be going up every year, and that $10 'it's the thought that counts' gift to cousin Theodore quickly becomes $20," says Tran. Take advantage of retailers' free shipping promotions when they're available to save on shipping costs. Additionally, a quick coupon search on your browser can help you save money off shipping or the overall cost of your gift.
Cold and Flu Season
Getting the sniffles is no fun, especially when you have delicious treats to eat and loved ones to spend time with. The more time you spend shaking hands, shopping and mingling with others, the more apt you are to catch a bug. According to Affordable Schools Online and Frugal Dad, the average person with insurance can expect to pay $130 for a trip to the doctor and medicine to treat the flu. This year, factor into your budget any non-paid sick days you may take along with treatment costs to rid what ails you.
Increased Utility Bills
Cold weather often means an increase in electricity or gas usage. You may also find yourself baking more, and consequently running the dishwasher more, throughout the holiday season. Frankle says these costs are generally manageable. If you dread utility bills with skyrocket prices, speak to your provider about getting on an equalizer payment plan. That divides the average cost of your utilities evenly between 12 months, allowing you to budget more accurately.
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