Keep Holiday $pending in Check
Holiday gift giving is a tradition which can both warm our hearts and burn our budgets if we aren’t careful. While it’s easy to get caught up in the seasonal shopping hysteria, some smart planning and good common sense can get you through the season without compromising your financial health. The National Foundation for Credit Counseling offers some simple advice to help you keep your holiday spending in check.
$$ Develop a spending budget. Write down household and personal expenses for November and December. For each month, subtract the total amount of expenses from your monthly take-home pay. The amount left over each month becomes a starting point to gauge how much you can afford to spend. If you don’t have a lot of disposable cash left over, be smart. Consider making some of your gifts or giving an “IOU” coupon for services you will provide, i.e., babysitting, making a meal, blowing leaves, or doing the shopping for someone. The gift of your time is worth more than the cost of an expensive trinket that might soon be forgotten, long before you have paid off the credit card bill.
$$ Follow Santa’s lead. Make a list of all the people you need or want to buy gifts for, including small gifts for babysitters, teachers, newspaper deliverers, etc. Then allocate the amount you can pay for each gift. The total shouldn’t exceed what you have to spend. Even small gifts can add up and are often the cause of going over your gift budget. Be sure you include all potential expenditures including: holiday cards, postage, holiday parties, decorations, holiday entertainment, etc. And remember, you can avoid over-the-top postage for gift delivery by shopping and shipping early.
$$ Give a gift of health. Consider giving a gift that can positively impact the health of the recipient. Have a friend or loved one who has wanted to get in shape? Give a pedometer and offer to walk or exercise with them a couple of days a week. Or give a low-salt or low-fat healthy cookbook to someone who is struggling with high blood pressure or cholesterol. Put together your own fruit baskets for healthy gifts that will be a welcome change during this season of rich, high-calorie treats.
$$ Look for shopping deals. Check out retail sales, special discounts and coupons in circulars or newspapers and deals online. Consider purchasing holiday decorations in-bulk and splitting the costs with friends and family members. These deals can add up to substantial savings.
$$ Avoid last minute shopping. Plan your shopping trips in advance and shop as early as possible before the holiday rush. Also, never shop when you are tired or hungry. In your rush to get it over with, you could find your eyes were bigger than your stomach or your wallet.
$$ Save your receipts. If items go on sale after the holiday rush, you can sometimes be refunded the difference between the price you paid and the sales price. Some retailers also will discount an item if you have proof that their purchase price is higher than one advertised by their competitor.
$$ Pay with cash when possible and spend wisely. The best approach is to take only the amount of cash you need to purchase the gifts on your list. If possible, leave your checkbook and credit cards at home to avoid temptations for unplanned and unnecessary purchases. If using credit is unavoidable, limit purchases to one card. Use the credit card with the lowest interest rate and don’t use more credit than you can afford to pay off in 90 days or less. Remember, credit card debt amounts to a short-term loan. The longer the length of the loan, the more you will pay.