Avoid the Holiday Spending Hangover

When holiday shopping begins, it can be easy to overdo it. The excitement created by the lure of big savings and special deals combined with the spirit of giving can be intoxicating. But having a plan and sticking to it can help make sure you don’t end up with a holiday hangover when the bills arrive. Simple planning can make the season more care-free and enjoyable when you know you’re in control of your budget. To help you spend within your means and enjoy a financially happy New Year, consider the following tips: 

• Develop a budget. Before you start shopping, develop a realistic budget. Consider your income, subtract your normal monthly expenses, and then add any savings to whatever cash is left over. If you need to use your credit card, think about what you can afford to pay back in January.  Don’t forget costs beyond gifts, like postage, gift wrap, decorations, greeting cards, food, travel, and charitable contributions. 

• Make a list and check it twice. Keep your gift list limited to family and close friends, noting how much you want to spend on each.  

• Spend carefully. Avoid shopping while rushed or under pressure, which can lead to overspending.  Try to comparison shop by reviewing ads and online retailers’ sales and prices first, especially for the big ticket items.  Before you head to the checkout, make sure your purchase is within the budget you set. 

• Avoid traps. Finding a spectacular sale on something you’ve been wanting can easily throw you off course.  Stay strong and stick to your budget.  And don’t apply for store credit cards you don’t need just to get a one-time discount. 

• Use credit wisely. Limit the use of credit for holiday spending.  If you must use credit, use only one card, preferably the one with the lowest interest rate, and leave the rest at home. Pick a date when you can pay off your holiday credit card bills, and commit to paying off the balance by that time.  Be sure to check statements for unauthorized charges and report them immediately. 
   
• Save your receipts. Not only will you need them for possible returns, you’ll need them to keep track of what you’ve spent and to compare with your bank account and credit card statements.  Knowing how much you spent will help you plan for next year, too.
   
• Be creative. Consider simple, hand-made gifts instead of store-bought ones.  Send greeting cards or handwritten notes of appreciation for those outside of your list.  Home-baked goods, simple crafts, or hand-made gift certificates for your time or talents are often less expensive, more appreciated, and more memorable. 

• Get a jump on next year. If you don’t have one already, make it a New Year’s resolution to open a holiday savings account for next year and arrange to automatically deposit as little as $10 each week to help build next year’s holiday shopping fund!