What if you could have a wonderful, memorable holiday and avoid the financial hangover afterwards? Here are a few great tips on how to keep your holiday spending in check.
Find an Alternative to Gift Giving
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.
Cut Expenses Elsewhere.
Perhaps you can dine out or go to the movies less often or forego that new pair of shoes you’ve been wanting. It doesn’t matter where you make cuts, just that you make them. Keeping your other spending under control while you’re out there shopping can be a challenge, but keep repeating to yourself the importance of not over-spending.
Set a Holiday Budget.
While you’re doing your holiday shopping, your new best friends should be your bank account and credit card records. It’s easy to get into a spending rhythm when shopping for yourself or others, and that’s why you need to keep track of every purchase you make and make sure you don’t go over your budget.
Don’t Buy 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.
Leave the Plastic at Home.
Many of us can explain away spending so much on gifts because we simply charge everything and reason that we can pay it off gradually after the holidays. This is a great way to create a never-ending cycle of consumer debt for yourself. It only creates unnecessary financial stress for you after the holidays.
Invest in Your Child’s Future.
It may not seem as exciting to your kids as a new iPod, but a contribution to their financial well-being will be appreciated long after such expensive “toys” are obsolete. Grandparents can contribute to a college tuition fund or savings account rather than buy stuff kids don’t need. Or make one of your gifts to your kids or grandkids a stock fund portfolio that can start accruing now.
Give the Gift of Time.
Often, parents buy gifts for their kids with the best of intentions. But a better choice might be to make time with your kids to go to the zoo, a play, or a special event. Emphasize that giving-back is the most rewarding gift of all and take them caroling at a local retirement home. All of these activities cost next to nothing, and they will be fun for the kids and for you.
Look for Meaningful Gifts.
Remember that meaningful gifts don’t necessarily have a big price tag. If you are looking to give a gift that truly means something and will keep its value for years to come, you are better off looking for nonmaterial gifts to give than for something your gift recipients could get themselves at the local big box store.
Achieve a Happy Balance.
Money can easily become the focus of the holidays when it should be the last thing you are thinking about. By keeping your spending under control, you can have a great holiday and avoid the sick feeling in the pit of your stomach when you start getting those January credit card bills. If you prepare properly, you can achieve a happy balance of spending and saving during the holiday season. That’s a great gift in and of itself for both you and the people you love.
Eric Tyson, MBA, is an internationally acclaimed and best-selling personal finance author, counselor, and writer and has been interviewed on TV, radio, and for print publications. His latest book is Mutual Funds For Dummies® 8th Edition available at bookstores everywhere. For more information, visit www.wiley.com.