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By Stephen Sellner | Citizens Bank Staff
The holidays present a crossroads for many young adults. You’re not a kid anymore — gone are the days when you were showered with gifts and sweets with no expectation of returning the favor. And while you’re an adult now, you’re not quite established enough to comfortably cover gift, travel, and holiday party expenses.
It’s tough. Your budget is tight — no thanks to student debt — but you still want to show the people in your life that you care about them. That is, without limiting your social life to Netflix and Ramen noodles for the foreseeable future.
So how can you smartly maneuver the holidays without putting your bank account on life support? Let’s start by grouping the holidays into three main expenses: gifts, travel, and parties.
The first step is to set a cap for gift spending. The cap can be a grand total or a per-person limit. That way you don’t get carried away with the holiday spirit.
Second, use your listening ears all year, particularly after September, to find out what your loved ones actually need or really want, but wouldn’t buy for themselves. For instance, if your brother lives in a city and struggles with parallel parking, get him a back-up camera that he can install in his car. He’ll likely appreciate that more than some thoughtless, pricy gift.
Third, get creative! Sure, you could get your girlfriend an expensive necklace. Or, you could compile all your memorable moments from the past year into a customized photo album. Then, before you know it, you’ve got a fun tradition to keep going every year. Be honest — which gift do you think she’d prefer more?
Fourth, do a Yankee Swap or Secret Santa with all your friends. Buying gifts for friends can get really tricky — and expensive. Where do you draw the line? You don’t want to insult someone from your inner circle by not getting them a gift. And then there’s that worst possible scenario: a friend gets you a gift and you spiral into panic because you didn’t get them something. By doing a Yankee Swap or Secret Santa, you get to sit out this awkward dance since you only need one gift to participate, and everyone’s expectations are managed.
Live far from home? If so, flying home for the holidays can get pricy since it’s such a popular time to travel. Here are some tips to cut down on the cost:
Don’t be a hero with your holiday parties this year.
If you host a party, don’t feel pressured to supply all the food and drinks. Make it potluck, where everyone contributes a dish. Use Facebook to coordinate who brings what to avoid tripling up on something like brownies (not that leftover brownies are a bad thing). As for drinks, you can supply punch or some other concoction if you’d like. Just tell them to bring other drinks with them for when the communal drink is gone.
And let’s face it, decorations are an easy way to waste money. People may notice them when they first walk in, but once everyone gets settled into the party, they’re largely forgotten. Have some decorations, but don’t go overboard.
The holidays might sneak up on you, but the expense doesn’t have to. Some people have a lot of success putting aside a little bit from each paycheck to soften the blow once the holidays arrive.
Think of it this way: Automatically transferring $10 from each bi-weekly paycheck year-round to a “Holiday Spending” savings account would net you $260 by the end of the year. Who wouldn’t want a spare $260 lying around at that time? Through a small sacrifice (essentially $5 per week), you can soften the blow of your post-holiday credit card bill.
Looking for another way to find breathing room in your holiday budget? Look into refinancing your student loans. At this point, you could qualify for a lower interest rate than the one you and your cosigner got when you first went to school. A refinance could shave valuable dollars off your monthly student loan payment(s).
Those savings could be used elsewhere — getting your boyfriend tickets to see his favorite band in concert, putting a big dent in the price of your roundtrip airfare home, or buying the ingredients for a triple helping of your famous buffalo chicken dip for the holiday party.
Are you struggling to find breathing room in your monthly budget? Refinancing your student loans could be the key you need to unlock your financial freedom. See how much a Citizens Bank Education Refinance Loan could help you save.
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