'Tis the season: 5 advisor tips on how to save on holiday expenses
With the holiday season now upon us, I find myself telling clients to make sure they plan ahead and stay mindful of their finances. That way, they can truly enjoy being with their families and friends.
Without careful consideration, this time of the year can leave people feeling overextended financially—and what fun are the holidays if we're stressed out and broke by the end of it all? To help you enjoy this holiday season and stay financially sound throughout it, here are five ways to spend less this year.
(Read more: Advisors caution clients on overspending)
Host a potluck: Dining out is usually among my clients' biggest expenses, especially around the holidays. Everyone wants to get together for some sort of holiday celebration. But when you dine out, you end up paying for your meal, drinks, tax and a tip—and that can really add up.
Instead, take the initiative and plan holiday potluck dinners for family and friends. Choose a theme and have everyone bring a homemade dish. This is a great alternative. Not only does it help everyone save money, it's also a great way to enjoy each other's company in a comfortable, intimate setting.
Play 'Secret Santa': Buying gifts for everyone on your list can be expensive, especially if you have a large family. This year, opt for a "Secret Santa" gift exchange and have your entire family participate. Decide on a budget for presents—e.g., no more than $25 per gift—and then have every person pick just one name out of a bowl. Then, on the day of the exchange, you all reveal whose Secret Santa you were and have fun exchanging gifts with one another. This saves a lot of money; instead of buying for every family member, you only buy for one.
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Take a staycation: Although I live in Los Angeles, I don't always get to enjoy the many things there are to do here during the year. So, around each holiday season, I plan a weeklong stay-at-home vacation, or "staycation." It's a time to do as many free, "touristy" things in my city, preferably with friends and family, as I possibly can.
I work off of a running list of cool spots to visit or things to do that I compile during the year. You'd be amazed at how much you can do for free if you just make time to explore your own neighborhood. If you have kids, a staycation—free of airfare and hotel expenses—can save you a lot of money. Plan activities and outings as a family and set rules to ensure everyone stays in the vacation mindset. For example, no phones, work emails or computers. After all, holidays are meant for enjoying time with loved ones. And we don't have to leave our homes in order to do that.
Pay for airfare with points: One of the best ways to save money in this season is to use points from credit card or frequent-traveler rewards programs when booking holiday travel. Seems basic enough, but so many people never use their points—which means they're leaving money on the table. You can also use websites such as Kayak.com and Airfarewatchdog.com to track the best times to buy air tickets. And sites such as Airbnb.com are great for finding alternative places to stay in your holiday destination.
(Read more: Financial advisors tips for year-end planning)
Plan ahead for next year: Set up a holiday savings account and monthly contribution to it, so that when the holidays roll around next year, you will already have money in the bank to cover expenses. You can start with something as small as $20 a month. Then, add to it every few months—after you review your budget and financial goals for the year. Saving for specific goals, including the holidays, is so much easier when you can have a clear vision in mind and then automate your progress toward achieving it.
With a little mindfulness and planning, the holidays can actually be enjoyable—as opposed to stressful and hard on the budget. Implement the tips that resonate the most with you, and have a very happy holiday season.
—Brittney Castro is founder and CEO of Financially Wise Women, an investment advisory that specializes in helping women and couples meet their financial goals.