Saving During the Season of Giving
For many Americans, the holiday season often breaks the bank. The fun and frenzy of parties, gift giving and charity starts at Thanksgiving and continues through New Year’s Day. However, the pain of overspending lasts much longer with credit card bills rolling in for months to come and savings accounts sorely depleted. How about a resolution that starts now, rather than on New Year’s Day? Putting together a holiday budget and sticking to it will bring benefits now and in the months ahead as you start the year on a solid financial note, rather than with the stress that comes from overspending.
Start your budget by making a list of all the holiday spending categories you may incur. These may include gifts, holiday meals, holiday clothing, home decorations, travel expenses, charitable donations, and holiday tips for hairdressers, childcare workers and others. To make this job easier, search for downloadable worksheets on the Internet.
Next, set a spending limit for each of the categories, and be realistic about what you can afford to spend. Be as detailed as possible, listing how much you will spend on each person in your gift-giving budget. This will help you avoid impulse purchases. You might also find it beneficial to have a separate bank account for holiday spending. Simply make transfers from this account to your checking account when you are ready to buy something from your list.
Finally, keep track of what you spend. Save each paper receipt in an envelope labeled holiday purchases, and designate a folder in your email inbox for items that you buy online. Regularly reconcile the receipts with your budget to figure out what you have spent so far from each category. This will help you stay within your budget and provide a framework for next year’s holiday budget.
Look Before You Buy
As you start putting your home in order for holiday decorating and guests, look around for items that you may have forgotten you have – wrapping paper you bought on sale last year, decorations you stashed away and maybe even a gift that you bought at a post-season sale. Finding these things instantly eases the budget because they are things that you now do not need to buy.
The next part of looking around means that you should educate yourself by comparison shopping. Surf the Internet to compare prices on gifts and home décor. If you plan to buy gifts online, look for coupon codes that can be used to discount your price or get free shipping from specific online retailers. You can often find discounted shipping when you spend a certain amount, so it may pay to purchase several gifts from the same retailer to score the free shipping deal.
Comparison shop for your holiday food purchases, too. You can find what grocery items are on sale each week at your favorite stores through newspaper circulars and through the store website. By anticipating your holiday food needs, you may be able to take advantage of store sales by buying some things before you actually need them. You can save even more by using digital coupons available for many grocery retailers or paper coupons usually found once a week in your local newspaper.
Overspending with your credit cards can be so easy to do, but it results in one of the most painful mistakes made over the holidays. It will end up costing you all year long. Make your whole year a lot less stressful by making a commitment to use only cash or your debit card to avoid overspending. And once again, keep close track of what you spend, regardless of your method of payment.
By developing a holiday budget and sticking to it, you will be giving yourself the gift of avoiding the stress that comes from overspending. Better yet, master the tool of the budget for a skill you can put to use for a lifetime of financial well-being.