Tips To Stretch Your Budget This Holiday Season
Savvy shoppers plan for their holiday buying. They create a budget, save throughout the year, avoid credit, and stick to their plans. Here are some tips offered by smart shoppers.
1. Make a Plan For Your Spending
Start with a realistic idea of how much you can spend on all your holiday purchases. Make a list of everything you usually buy, from the gifts to food to entertainment to travel expenses, and tally the costs.
“If you don’t budget and set a specific dollar limit, then your spending grows and grows and grows. In January you’ll be horrified by how much you’ve spent,” says Mari Adam, a Certified Financial Planner in Boca Raton, Fla. “And, don’t get locked into the thought that how much you spend measures how good of a person you are.”
2. Know Your Limits
Not many can afford to shop carte blanche, so don’t try! Make a list of gift recipients and decide how much you want to spend on each person. If you’re unable to spend as much on gifts this year, prioritize for whom you really want to buy gifts. Then communicate your plans to family and friends, says Adam. “If you tell them you won’t be exchanging gifts this year, then you won’t feel embarrassed if they purchase you a gift.” You want to be able to pay off your holiday expenses within three months after the holidays, four at the most.
3. Keep Track of Your Spending
You’ve made a spending plan — great! But if you don’t keep track of all your purchases and make sure you’re staying within your budget, you’ve wasted your time. Write down everything you spend on holiday clothing, cards, postage, wrapping paper and decorations, reminds Dvorkin. “Don’t forget that these holiday expenses add up and need to be tracked on your budget.”
4. Stick To Your Shopping List
Know what you want to buy, and go to the store with a list. You can zip through the stores faster and are more apt to avoid impulse buying, says Dvorkin. When you have finished shopping, stop.
5. Avoid Last Minute Shopping
“The best window for holiday shopping is between Oct. 1 and Dec. 1,” says Dvorkin. “Don’t wait until the last minute. Give yourself time to compare prices and find the best deals.” An all-out shopping spree leaves you exhausted from shopping, tempting you to buy the next thing you see regardless of cost. Last-minute shoppers are unlikely to save money.
6. Research Your Shopping – Compare
Comparison-shopping stretches your holiday funds further. Fight the urge to get your shopping over quickly, recommends the Consumer Federation of America and the Credit Union National Association. Instead, take some extra time to find the best deal before heading off to the stores by scouring catalogs, sales advertisements and the Internet.
Easier said than done. Most people are frazzled with their jobs and busy holiday schedule. They often work right up until Christmas, so their holiday shopping is done last minute, says Adam.
7. Pay With Cash, Leave Your Card At Home
Leave your credit cards at home. “Spend cash. This will force you to budget and make overspending more obvious,” says Dvorkin. According to the CCCS, people spend up to a third more when paying with credit instead of cash. There is no emotional attachment to plastic like there is to cash.
But, if you must use plastic, Myvesta.org suggests that you deduct all your purchases in your checkbook register. That way, when the bill arrives, the money will be in your checking account to pay the bill in full.
8. Limit Your Credit Card Use
Shop with no more than two credit cards — preferably low-interest rate credit cards, not the expensive department store cards. The more cards you use, the harder it is to track spending. Use one with a zero balance for purchases you will pay off in full. Use the other, low-interest rate credit card for purchases you plan to pay off over the next few months.
9. Avoid the Hype, Avoid New Card Offers
Don’t shop under the influence of holiday hype. Retailers work hard to entice you to buy, buy and buy. If you’re not careful, you’ll spend more than you planned. Don’t fall for credit card offers to “skip a payment.” You’ll just pay more in interest next month. Watch out for the “buy now and pay later” offers that encourage you to spend money you don’t have. And, bypass applying for the department store credit card to get a one-time discount.