Making Homemade Holiday Gifts? Be Sure to Avoid This Trap

Gifts from the heart are a good thing -- as long as you don't overspend in the course of making them.

Different people take different approaches to gift-giving during the holidays. Some people like to hit the stores and purchase items to give out, while others prefer to make their own gifts.

Going the latter route has its benefits. Not only can you personalize those gifts and show they're really coming from the heart, but there's also the potential to save money by making gifts yourself.

If you're going to go the homemade route this holiday season, be sure to keep track of what you're spending. Otherwise, you could end up landing in debt just as you could by buying things in stores.

Set a budget and stick to it

Though it's often the case that homemade gifts are cheaper than store-bought alternatives, that won't always hold true. That's why it's important to set a spending budget if you'll be making your own gifts. If you're not careful, the supplies you procure could end up being so expensive that you're forced to rack up a balance on your credit cards.

Before you start your crafting, knitting, or baking, make a list of the people you want to give gifts to. Then, take a look at your bank account and figure out how much you can afford to spend.

You may have money available outside of your paycheck, like cash in a savings account you specifically set aside for the holidays. But figure out how much you can spend across all of your holiday expenses -- not just gifts. If you'll be traveling to see family, for example, you'll need to factor the cost of airfare or fuel into your calculations.

Once you figure out how much you can afford to spend, take a little time to source your materials strategically. If you'll be baking up a storm, it could make sense to purchase certain supplies in bulk.

Also, don't forget the cost of packaging your gifts. If you're giving out assortments of homemade cookies, do you really want to hand them out in Ziplock bags? Or would you prefer to pack them in decorative tins? If the latter sounds more appealing, you'll need to factor in the cost of those tins. Also, you'll want to do a little research to see where those tins can be procured for the least amount of money.

Don't go overboard with holiday gifts

It's easy to assume that you won't bust your budget by making homemade gifts for the holidays. But remember, the cost of supplies can really add up. This especially holds true today, when the cost of just about everything has gotten more expensive due to recent inflation.

Just as it's important to stick to a plan when buying gifts from stores, be sure to do the same if you'll be making those gifts yourself. Finally, be careful about making homemade gifts if you're self-employed. If spending hours crafting, crocheting, or baking takes you away from your work, your income could take a hit. That, too, could be a recipe for unwanted debt during the holiday season.