How to Make a Holiday Shopping Budget During Inflation

There’s a lot of hustle and bustle during the holidays. It can be a very joyous time, but potentially very stressful. There’s especially a lot of spending going on during this time of year, plus something new to consider – inflation! The inflation rate in the United States went up to 9.1% in June but dropped down to 7.7% in October. We won’t know what the inflation rate is in December until the Bureau of Labor Statistics publishes December’s rate in January. The bureau releases the rates each month for the previous month. Inflation has been trending downward since June of this year, but it still has a strong impact on holiday spending and consumers’ holiday shopping budgets. Even with the inflation rate as it is, the National Retail Federation is forecasting holiday sales to increase by 6% - 8% from 2021. So, let’s talk about budgeting during the holidays!

How do you do holidays on a budget?

You can plan and budget for the whole year with the 50/30/20 budget rule. No worries if you haven’t planned ahead and are starting off by budgeting just for the holidays. First things first, start by adding up the holiday costs that you know you’ll have. Think about the gifts you plan on purchasing, parties you’ll be throwing or attending, and any charitable giving. This might be the first time you’ve considered a budget during the holidays. If not, what was your budget last year or in previous years?

Your budget could have changed year to year, but you can use your spending from prior years as a starting point. There are years when you might go all out or travel overseas, and others when you preferred a quiet holiday season at home with a limited number of people. Inflation was most likely not a factor in previous years so keep in mind the 7.7% inflation rate that we know of from October of this year.

Gift-Giving Budget

Next, let’s consider who you’re shopping for this holiday season. Who do you plan on buying gifts for and what price ranges are you considering? Purchasing gifts during the holidays is arguably the largest part of your holiday budget. Don’t just think about these things but keep a list – and check it twice. Some prefer pen and paper, but a spreadsheet would come in handy in this situation. You can use a free online tool like Google Sheets or ClickUp. Make sure to add a cell that keeps track of the total spend.

Holiday Party Budgeting

Once you’ve figured out the gift-giving portion, you’re ready to start budgeting for the celebration. Many people travel for the holidays and your budget might need to be larger if you’re celebrating away from home. Try to decide if you're traveling early on to avoid increased travel costs that are the result of last-minute travel arrangements.

If you’re staying home, consider the invitations you have or may receive from your family and friends. What will you be bringing to the parties you’re invited to, other than gifts? You may need to bring items for a potluck or cover the cost of meals at a restaurant. Lastly, will you be throwing a party at your home? If so, consider the number of people you will be inviting and what kind of food and beverages you plan on serving. There’s always the option of catering your party but you can probably save more money by doing the grocery shopping and cooking on your own. Check out these 10 easy ways to save money on groceries, even during high inflation. Also, you may want to decorate your home for the celebration, which could add up and make a dent in your wallet.

Hopefully, you can create a budget that you’re able to stick to. Now that you’re budgeting for this year’s holidays, you may want to try saving for next year’s holiday season in advance. Use the total amount that you spend this year as an amount to save for next year. If you feel as though you could use some help with your holiday spending, Check `n Go’s installment loans are here to help. We have the personal loans that you need, even for those with bad credit. Apply online or in-store today!