Smart Quiz: What Should You Use to Avoid Overspending on Gifts This Year?

• Holiday Budget
• Cash Only
• Secure Credit Card
• Store Credit Card

Answer: Holiday Budget

Black Friday, Cyber Monday, and now that last-minute crunch to finish shopping. You’ve got a list of gifts to buy a mile long. While it’s “beginning to look a lot like Christmas,” if you overspend now, you’ll be singing a different tune come January. Overspending this time of year can be a recipe for financial distress. It doesn’t matter how many “sales” you take advantage of; spending more than you can afford can quickly take the magic right out of the holidays.

There are lots of ways to curb your spending, but the best way is to make a budget and stick to it. Check out these holiday budgeting tips before you leave the house.

Crunch the Numbers

Start by figuring out how much money you have saved for the holidays. Have you been contributing to a Christmas Club account or setting money aside in savings? How much more will you be able to add to that fund between now and your holiday celebrations? This total number is your maximum budget. Period. Do not take money from other line-items on your regular budget or use credit to pay for the holidays.

You can start to calculate your expenses after you know what your spending limit is. Gifts aren’t the only holiday expense. A holiday budget includes home decor, holiday baking supplies, and food for your holiday feast. Don’t forget to factor in the cost of any new clothing you may have to purchase for a holiday party or special event, extra gas for traveling, and even some spare cash for the charitable donations you’ll be asked to make.

Have a solid list? Now, start trimming it down. Make do with last year’s lawn inflatables and tree toppers instead of buying new ones. Hosting dinner? Be more specific when you delegate tasks to the family members who are visiting. Make a list of dishes and ask each person for something different. This not only takes some of the food off of your grocery list, but will help ensure you don’t end up with three mashed potato dishes, 5 desserts, and nothing else to have with your main course.

Do you really need to buy a gift for everyone on your list, or do you just want to? Look at your list of recipients and decide how much you can realistically spend on each. Think about who you can scratch off the list if your budget gets too tight.

Shop Sales

Sales circulars come out early for a good reason. Marketers hope you’ll be drawn to their “flashy” deal and end up doing the majority of your shopping in the same store. That can spell disaster for your budget. Look at each circular carefully. Decide which item you will buy for each person and from where, BEFORE you head out. Remember, there will be sales all season long. Try not to get fixated on one particular weekend of deals.

Start Budgeting Early

Take some time in January, when thing slow down, to make an inventory of what you spent this year. Give some thought to how you can change things up for next year. Once you have your preliminary numbers in place, start putting some money away each paycheck toward those goals. Come next fall, you’ll be glad you did.

~Here’s to Your Financial Health

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