Your Money
Tips to Control Your Holiday Spending
December 2018
By Nancy Burger
During the hectic lead-up to the holidays, it's tough not to get sucked into one pop-up ad after another for the next-best-gift-you-can't-live-without. But this can quickly lead us down a rabbit hole of over-spending. Buying gifts for those we love is fun - no doubt - but it's not fun to start the new year with hefty credit card bills…and regrets.
Here are a few tips for keeping holiday spending in check:
Make a List and Check it Twice
A gift-giving budget can be a useful tool. Make a list of everyone you plan to buy for (don't forget to include tips for service providers, mail carriers, etc.) and note how much you plan to spend on each. Be realistic about your budget - if the total will leave you with credit card debt, now is the time to take a second look and tweak the list.
Debit or credit?
There's no better way to reign in spending than to see the purchases hit your bank account in real time, so use a debit card whenever you can. Credit cards are useful and a great way to earn rewards points, etc., but ONLY if you pay down the entire balance each month. Using plastic to buy beyond your means is a recipe for financial disaster. Although the human brain is great at rationalizing spending during "special" times of the year, it won't feel too special when you're faced with exorbitant interest rates on a pile of debt.
Traditions Trump Excess:
If you're on a tight budget, consider introducing new traditions to celebrate the holidays with loved ones. Maybe arrange a gathering to bake and exchange holiday cookies or make crafts to give. A fun day spent with family and friends, and away from the mall, can be a memorable and meaningful way to celebrate.
Resist Impulse Purchases
Planning ahead is the best way to control holiday spending. Cinnamon-scented stores stuffed with frantic shoppers and holiday bling can be a tempting trap that can quickly derail your budget. You might find yourself at the end of the serpentine check-out line with everything EXCEPT what was on your list. Use that time on line to chip away at the items in your cart. After all, will your Uncle Bob really use a beer mug that doubles as a whoopee cushion?
Don't wait until the last minute!
Shopping for gifts is only one part of the season, so the earlier you get it done the longer you have to enjoy time spent with friends and family. Besides sides-stepping impulse buys, being organized about both your shopping and your spending can keep holiday stress at bay - and help you embrace what it is you're celebrating.
Lottery Gift-Giving
This can be a great way for larger groups and families to celebrate the season within a budget. Consider doing a Secret Santa or Yankee Swap in which everyone must buy for only one other person. Set a budget that makes sense for your group or, better yet, have everyone make their own gifts. Concentrating on one person can be super fun, and it can also super-charge your imagination and creativity.
The holidays can be a stressful time, so make a choice early on about how you want to spend your energy and your money. Then stick to your plan! Giving someone you love a thoughtful, personal gift doesn't require breaking the bank and could be more fun. Of course, there are times when a special gift is appropriate and exciting to give, but the key is to plan for it and adjust the rest of your spending so you don't end up knee-deep in holiday debt.
Here are a few tips for keeping holiday spending in check:
Make a List and Check it Twice
A gift-giving budget can be a useful tool. Make a list of everyone you plan to buy for (don't forget to include tips for service providers, mail carriers, etc.) and note how much you plan to spend on each. Be realistic about your budget - if the total will leave you with credit card debt, now is the time to take a second look and tweak the list.
Debit or credit?
There's no better way to reign in spending than to see the purchases hit your bank account in real time, so use a debit card whenever you can. Credit cards are useful and a great way to earn rewards points, etc., but ONLY if you pay down the entire balance each month. Using plastic to buy beyond your means is a recipe for financial disaster. Although the human brain is great at rationalizing spending during "special" times of the year, it won't feel too special when you're faced with exorbitant interest rates on a pile of debt.
Traditions Trump Excess:
If you're on a tight budget, consider introducing new traditions to celebrate the holidays with loved ones. Maybe arrange a gathering to bake and exchange holiday cookies or make crafts to give. A fun day spent with family and friends, and away from the mall, can be a memorable and meaningful way to celebrate.
Resist Impulse Purchases
Planning ahead is the best way to control holiday spending. Cinnamon-scented stores stuffed with frantic shoppers and holiday bling can be a tempting trap that can quickly derail your budget. You might find yourself at the end of the serpentine check-out line with everything EXCEPT what was on your list. Use that time on line to chip away at the items in your cart. After all, will your Uncle Bob really use a beer mug that doubles as a whoopee cushion?
Don't wait until the last minute!
Shopping for gifts is only one part of the season, so the earlier you get it done the longer you have to enjoy time spent with friends and family. Besides sides-stepping impulse buys, being organized about both your shopping and your spending can keep holiday stress at bay - and help you embrace what it is you're celebrating.
Lottery Gift-Giving
This can be a great way for larger groups and families to celebrate the season within a budget. Consider doing a Secret Santa or Yankee Swap in which everyone must buy for only one other person. Set a budget that makes sense for your group or, better yet, have everyone make their own gifts. Concentrating on one person can be super fun, and it can also super-charge your imagination and creativity.
The holidays can be a stressful time, so make a choice early on about how you want to spend your energy and your money. Then stick to your plan! Giving someone you love a thoughtful, personal gift doesn't require breaking the bank and could be more fun. Of course, there are times when a special gift is appropriate and exciting to give, but the key is to plan for it and adjust the rest of your spending so you don't end up knee-deep in holiday debt.
Co-founder Nancy Burger started her finance career on Wall Street in the 1980’s and now works as a freelance analyst and writer for a money management firm. She has contributed to articles that have appeared in Forbes.com, Nasdaq.com, TheStreet.com and CNBC.com.
