Staying Off the Naughty (Spending) List: 10 Ways to Manage Your Finances and Avoid Post-Holiday Regrets
The holidays are upon us, bringing all those personal and family images and sensations we cherish. But for many of us, there are a few not-so-joyous holiday sights (a purse overflowing with credit card receipts) and sounds (the ca-ching! of the cash registers marking our escalating debt). These negatives can easily outweigh all that we love about the holiday season, especially during this less-than-prosperous economic period.
Overall, the Great Recession brought about a renewed dedication to saving. Before the recession, our national personal savings rate was close to zero, and now it’s around 3 percent. But it is very important that you not let your holiday spending zap all of the saving progress you made during the year.
Whether it’s a dedication to the gift-giving tradition, a sense of obligation, or a feeling that the holidays entitle us to have a little more fun than usual, too many of us seem to turn a blind eye to the budget-busting reality of all that spending over just a couple of months. Don’t let excessive holiday spending cause any unnecessary financial stress for you and your family.
What if you could have a wonderful, memorable holiday and avoid the financial hangover afterwards? Here are great tips on how to keep your holiday spending in check.
Find an alternative to gift-giving during the holidays. Many people feel they have to give gifts during the holidays, either because it’s a family tradition or because they know their friends and relatives have gotten gifts for them. There are plenty of great ways to trade in this tradition for another one that is even more meaningful, and chances are your family and friends will be happy to save gift-buying dough as well.
Instead of exchanging gifts, your family members might want to pool their money and spend it on a holiday outing. If you have kids, you’ll probably want to get them a little something, but set strict spending limits. Instead of piling up the toys, let each child choose an outing or event that he or she gets to spend with you one-on-one. Kids will look back on the valuable time you’ve spent together a lot more fondly than they will any toy or video game they use a couple of times and then toss aside.
If you must buy gifts, cut your expenses elsewhere as necessary. Perhaps you’d rather dine out or go to the movies less, or maybe you can forego that new pair of shoes you’ve been wanting for yourself in order to afford gifts for the grandparents. It doesn’t matter where you make cuts, just that you make them. Keeping your other spending under control while you’re out there doing your shopping can be a challenge, but just keep repeating to yourself the importance of not over-spending. That way when it comes time to actually pass out those presents you’ve purchased, you can do it without grimacing as you think about the damage they did to your bank account.
Set a budget and keep tabs on what you are spending. While you’re doing your holiday shopping, your new best friends should be your checkbook register, credit card statements, and all of your receipts. It’s easy to get into a spending rhythm when shopping for yourself or others, and that’s why you need to physically write down every purchase you make and make sure you don’t go over your budget. When you start to add up everything you’re spending, you may be shocked at what all those expenses from this store and that store add up to be. And don’t forget about all those ‘necessary’ holiday extras. Most people don’t budget their shopping and don’t realize that by the time you buy all the presents, plus wrapping paper, cards, decorations, etc., it’s added up to a ridiculous amount. Having a budget that you know you must stick to will help keep your impulse spending from getting out of hand and will help you hone in on the most reasonably priced holiday items.
Plan what you are going to buy, and don’t get any extras! Particularly during the holidays, companies pull out their most appealing packaging in hopes of snagging the eyes of shoppers. That’s why along with your budget, you’re going to want to take an exact list of what you want to buy for your gift recipients. Don’t go shopping for someone’s gift until you know exactly what you are going to buy.
It’s very easy to go in with no plan, see something you like, and get it simply because you have no idea what else to get for a hard-to-buy-for relative despite the gift’s significant price tag. Another temptation that the list will help you squelch is the desire to buy those little knickknacks here and there that you think will make nice small additions to the gifts you’ve purchased. Very rarely are things like this necessary, and if you’ve got your list in hand, it will be easier for you to pass them by without hesitation. Read More