November 30, 2008

5 Steps to Prepare Your Holiday Spending

Whether it's planning for Christmas, Hanukkah, a big New Year's Eve Bash, or a pricey winter vacation, the time is now to get your finances in order to avoid debt and regrets that can lead to the holiday blues. The season of gift-giving and fellowship too often creates the spirit of giving far beyond what you can realistically afford. However, if you start now you can be holiday guilt- and debt-free with the new year. Here are five ways to stay on track.

  1. Make a list and check it twice. Record everyone on your gift-giving list and be sure to check it twice. Set recommended amounts and then keep track of spending along the way. Recognize that over-spending in one area means that you MUST reduce costs in another...a notion that is easier said than done when you're in the throes of the holiday spirit. Check your list for necessities and consider changing the amount of a gift if your budget is looking tight. Remember, it really is the thought that counts!

  2. Create Expectations and stick to your budget. OK. You've got your magic budget number. But, unless everyone is willing to stick to it, then the target is for naught. The key is to communicate with family members and begin planning now to avoid last-minute weaknesses and over-buying.

  3. Use cash. Nothing will keep your spending in check better than using cash. Overspending becomes obvious because your cash will only go so far.People often spend 3 to 4 times more when using credit!Again, take your lists with you when you shop, stay within the dollar range you set for everything you have on your list, and pay cash for all holiday purchases.hen your cash is gone, stop shopping!

  4. Don't wait until the last minute. Start thinking about gifts and menus and activities, and everything holiday related early (well... NOW!). Give yourself time to comparison shop, catch holiday sales, and find the best deals. If you have something in mind, and the price is right, get it now. Don't wait and run the risk of it being out of stock, and then you'll have to scurry around to find a substitute and could wind up spending more. The closer it gets to the holiday, the more hectic its likely to get. Avoid the stress and pressure that comes with waiting until the last minute and causes you to overspend.

  5. Write down what you spend. Write down the amount you spend on each and every thing, regardless of the money source: checkbook, credit card, debit card, cash, or gift cards. No matter where the money comes from, it all counts toward how much you're spending overall. When you write down everything you're spending in black and white, and keep a running tally, it's a lot easier to recognize when you're getting out of control and need a spending reality check.

I hope you find these holiday spending tips helpful. If you use some of them, or all of them, be sure to let me know how they worked out for you!

Also, don't forget to share these tips with your friends, family members, and associates so they can stay out of holiday spending trouble too!