5 Hidden Holiday Costs That Can Ruin Your Budget

There's nothing like an unexpected bill to bring a swift end to that holiday cheer.

When we think about the holidays, we usually think about family, food, and gifts. We don't think about the cost -- or at least we try not to. Sure, many of us budget some money for gifts and possibly for those big holiday feasts, but there are other holiday expenses that are all too easy to overlook. Here are five you must prepare for if you don't want to enter the new year with a financial mess on your hands.

A pair of hands holds a credit card and phone over a notebook and some holiday garlands and chestnuts and fruits.

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1. Shipping

It used to be that you bought gifts for your family and friends at a brick-and-mortar store and gave them in person. But sometimes people move across the country for greener pastures. And with the rise of online shopping, shipping plays a factor in much of our holiday shopping today. It can add up quickly -- depending on what you're buying and how many different stores you buy from.

You could look for coupons and sales to help lower your costs. Some stores also offer free shipping to customers who spend more than a certain amount in a single order. This is worth considering if you plan to buy several things from a single store. Or you could just build the cost of shipping into your budget for each person. This might mean spending a little less on their gifts, so that the present and the shipping don't exceed the amount you decide to spend.

2. A higher electric bill

Do you string up Christmas lights indoors and out around the holidays? Then expect to see your electric bill go up a little to reflect that. If you're hosting family, your electric bill could rise even further from increased usage of the dishwasher, washer, dryer, and house lights. 

You can plan for this in your budget, but you should also aim to soften the blow by only running the dishwasher, washer, and dryer when they are full. Use energy-efficient LED lights whenever possible to reduce the impact your decorations have on your electricity bill. If you're going to be traveling for the holidays, consider lowering the temperature in your home by a few degrees to reduce your energy costs even further.

3. All those little travel expenses

We all know that holiday travel expenses can include hotels, flights, and rental cars, but we tend to forget about the smaller costs associated with travel, such as airport parking, parking in busy city lots, baggage fees, and overpriced food and water at the airport. Even if you plan to stay close to home for the holidays, you might be driving back and forth across town to visit friends and relatives and this could cost you extra in gas.

You may not be able to avoid many of these expenses. If you have a good travel rewards credit card that helps you save on travel costs, use it. If you don’t, think through your trip and what you're going to be doing and save some extra money beforehand to cover these smaller travel costs.

4. Charitable contributions

The holidays are a popular time for charitable giving. Whether you attend religious services or shop at a store where Salvation Army bell ringers camp out around the holidays, you'll probably be met with at least one opportunity to donate to a good cause. Of course, this is completely optional, but many want to give out of the goodness of their hearts. If you intend to do so, build this cost into your budget now.

You should also note that you can deduct charitable contributions on your taxes. Keep records of whom you donated to and how much you donated. It's best to keep receipts or written records, especially if you're donating a large sum of money. You don't have to submit this documentation with your taxes, but the government could request it if it audits you.

5. Self-gifting

It's probably happened to all of us. You're shopping for a gift for a friend or relative when all of a sudden you stumble upon something you'd really like for yourself. Rather than give into the temptation to buy it, consider recommending it to a friend or family member who is looking to buy a gift for you. You could also wait to purchase the gift until after the holiday season, especially if you think you might receive cash over the holidays. Or, if you absolutely can't help but shop for yourself, set a limit just as you would for anyone else on your list and don't allow yourself to exceed it.

Once the holiday season is truly underway, you'll probably be too busy with party-planning, gift-wrapping, cooking, and eating to worry about budgeting, so build these often-overlooked costs into your holiday plan now. That way, all you'll have to worry about after the holidays is taking down the decorations and dividing up the leftovers.

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