The holiday season brings warmth, family gatherings, and joyful celebrations—but also a spike in spending that can quickly disrupt financial plans. Americans are projected to spend nearly $1 trillion this holiday season, marking another record-breaking year of costs.

So, how can you enjoy the season without overspending?

This article by Bulman Wealth Group shares practical strategies to celebrate without compromising financial security. With decades of experience building custom financial plans, our team of fiduciary financial advisors in California offers tips to help you navigate the season confidently and keep spending in check.

Understanding Your Current Financial Situation

Review Your Budget

The foundation of financial confidence lies in understanding your income, expenses, and savings. Start by reviewing your current budget, focusing on both essential and discretionary expenses. Knowing exactly where your money is going each month can highlight areas where holiday spending might fit or where adjustments are needed to cover additional costs.

Identify Discretionary Spending

Recognize flexible areas in your budget. Categories like dining out, entertainment, or extra subscription services can often be reduced temporarily, creating space for holiday spending. A clear view of your discretionary expenses can help you prioritize holiday purchases and avoid unnecessary debt.

Setting Realistic Holiday Goals

One key to managing holiday expenses is setting clear spending limits based on priorities. While it’s tempting to splurge on gifts or decorations, identifying what matters most can guide your choices and keep holiday joy alive without risking financial strain.

A dedicated holiday budget can cover specific categories such as gifts, decorations, food, and travel. Start with a rough estimate of total holiday spending and allocate funds to each category. Sticking to this budget can make it easier to avoid overspending and ensure all necessary expenses are covered.

Tips for Saving Money on Gifts

Homemade gifts: Consider making personalized gifts. Homemade items, like baked goods or handcrafted items, can be heartfelt and cost-effective. With some creativity, you can give meaningful gifts that show thoughtfulness without a high price tag.

Gift exchanges: Participating in activities like Secret Santa can be a great way to save. Setting a spending limit and only buying for one person cuts down on costs while keeping the joy of gift-giving alive for everyone involved.

Secondhand shopping: Thrift stores, consignment shops, and online marketplaces offer quality secondhand items that can make great gifts. You can often find unique, gently used items at a fraction of the retail price.

Managing Holiday Food Expenses

Food and drink costs have soared in recent years, making it even more important to plan holiday meals. Meal planning and grocery lists help prevent impulse buys, making sure you purchase only what you need and avoid waste. Additional tips include:

• Cooking at home: Preparing holiday meals at home is usually more affordable than dining out. Home-cooked meals allow for customization, leftovers, and cost savings, creating memorable gatherings on a budget.

• Using leftovers: Make the most of leftovers by planning second meals, like soups, casseroles, or sandwiches. This reduces food waste, stretches your grocery budget, and extends the joy of holiday meals.

Avoiding Holiday Debt

Credit Card Use

Using credit cards for holiday purchases can quickly lead to debt, especially with interest charges that accumulate if balances aren’t paid off right away. If you use credit cards and aim to spend within a limit, you can pay off immediately to avoid interest.

Payment Plans

Consider payment options like installment plans or balance transfers for any holiday expenses you can’t pay immediately. Setting a clear timeline for repaying these costs will prevent overspending from lingering into the new year.

Emergency Fund

An emergency fund is a helpful backup to cover unexpected holiday expenses without resorting to high-interest debt. With a fund in place, you’re less likely to disrupt your regular financial goals.

Additional Considerations for Retirement Planning in California

Balancing holiday spending with your broader financial situation is wise whether you’re retired or approaching retirement. Here are a few key areas to consider:

• Monthly income: Set holiday spending limits based on sources like Social Security or pensions to avoid straining regular expenses. An experienced financial advisor like those with Bulman can help you explore additional income strategies, identifying ways to enhance your cash flow during retirement.

• Healthcare planning: Unexpected medical expenses can significantly impact your retirement budget. Plan holiday spending with these potential costs in mind. A key focus at Bulman Wealth Group is preparing for healthcare needs, including long-term care planning in California, to help seek to protect your financial security.

• Gifting and tax strategies: Year-end spending can impact retirement tax benefits in California. Charitable donations through Donor-Advised Funds (DAFs) or using RMDs for Qualified Charitable Distributions (QCDs) allow you to support causes you care about while potentially reducing your taxable income. Gifting strategies, such as annual gifts to family members, may lower your taxable estate and provide valuable tax advantages. Integrating these strategies can support both holiday spending and legacy planning goals.

Bulman Wealth Group’s California-based team is dedicated to helping you build financial confidence in California, offering guidance for your unique retirement needs.

Bulman Wealth Can Help

Managing holiday expenses with long-term financial goals requires careful planning. At Bulman, we’ve observed that the absence of a coherent financial plan and a clear retirement strategy often leaves people feeling overwhelmed. 

Whether in retirement or planning for it, we provide strategies to help you make the most of your income, preserve your assets, and avoid unnecessary debt. We take pride in providing a full range of financial solutions in one place.

If you’re looking for financial confidence in California, Bulman advisors can help with everything from investment management and retirement income planning to healthcare in retirement, tax planning, and estate planning.

Our team will work with you to develop a personalized plan that aligns with your goals, supports your budget, and considers tax benefits specific to California.

Reach out to us today to schedule a consultation and enjoy a financially confident holiday season.

All content is for information purposes only. It is not intended to provide any tax or legal advice or provide the basis for any financial decisions. Nor is it intended to be a projection of current or future performance or an indication of future results.

Opinions expressed herein are solely those of Chris Bulman Inc. dba Bulman Wealth Group and our editorial staff. The information contained in this material has been derived from sources believed to be reliable but is not guaranteed as to accuracy and completeness and does not purport to be a complete analysis of the materials discussed. All information and ideas should be discussed in detail with your individual advisor prior to implementation. Investment advisory services are offered through Chris Bulman Inc dba Bulman Wealth Group, an SEC Registered Investment Advisor. Insurance products and services are offered through Chris Bulman, Inc. dba BWG Insurance Agency and Ameritas Life Insurance Corp., CA State Insurance License # 0M46922. Being registered as an investment advisor does not imply a certain level of skill or training.

Bulman Wealth Group, BWG Insurance Agency and Ameritas Life Insurance Corp. are not affiliated with or endorsed by the Social Security Administration or any other government agency.

Any statements or opinions expressed should in no way be construed or interpreted as a solicitation to sell, or offer to sell, advisory services to any residents of any State other than the States where otherwise legally permitted.