Preparing for December
By Nancy Honig
We have just passed the halfway point to the most expensive shopping season of the year. According to the National Retail Federation survey, families spend over $1,000 on average on holiday purchases. Only 42 percent of shoppers said they’ll pay off those purchases in three months or less. More said it will take five months or more, according to one report. Depending on when you get paid, there are only ten to thirteen paychecks left before these holidays. To avoid the dreaded holiday debt hangover from overspending, the best way to do it is to start planning, saving, and shopping now.
With the high cost of gas, groceries, shipping cost etc. there is even more concern about people going into this coming holiday seasoning. Here’s how to plan now and avoid holiday debt hangover…
- Start Saving. If you haven’t started putting some money aside for the holidays, then begin today. Even if it is a small amount, routinely put aside some money. You can set up a special savings account for it, or simply find a great hiding place to stash it away until the holidays. Keep it separate from household and regular savings so that you know it has a specific purpose.
- Don’t spend it. The easiest way to save money. Don’t spend it. You might have what you need in forgotten recesses in your home. Look through the garage, attic, and closets for unused and unopened items from years past. You might find a blender your in-laws sent you that you never bothered to use. It also can be a great time to pass on a treasured family heirloom as a holiday gift. Consider giving homemade gift certificates for providing services such as babysitting, house cleaning, or dog walking. Gift cards for providing a special baked good when they choose can also defer cost until a later date.
- Cut wasteful spending. Do you habitually throw that celebrity magazine and candy bar in your cart at the grocery store? Take note of that kind of spending and stop. You can free up more cash for the holidays that way. Those little, unnecessary expenses add up to a lot. Every candy bar you don’t buy now can prevent you from swiping the credit card later.
- Set your spending limit. It’s important to take a hard look at your budget and decide how much money you have available to spend during the gift-giving season. When you are considering this amount, be sure that you only use money that you have set aside or extra money that you can find in your budget. It’s important to not plan on spending more than you have saved initially with a plan to pay it off later. When holiday shopping, try to stick to a cash-only system. Putting the gifts on a credit card makes it easier to overspend. Credit cards almost always have double-digit interest rates, and a $1,000 charge to a credit card for holiday gifts paid back at the minimum payment could end up costing you $1,800 or more.
- Make your list early and give it a thorough look. Who do you absolutely need to send gifts to, and who would appreciate a heartfelt card just as much. Providing gifts can also make others feel like they must reciprocate even if they can’t afford to, so be mindful of that as well.
- Do more DIY. Giving thoughtful homemade gifts can certainly cut down on cost. Starting now provides enough time to make those gifts and checks them off the box as done and ready to give.
- Research the best deals. Price out what you plan to purchase over the next few months. You may have a brick-and-mortar discount store close to home. But it’s worth checking online to see if there’s another that can beat its prices. You have time to search now. Bargain hunting will be a lot more competitive in a few months.
- Use email to your advantage. A Google account is free to set up, and you’re able to have more than one email. Create one specifically for your holiday shopping. Use it to subscribe to email lists at the stores you plan to shop at. Those pesky notifications might get annoying – but, buried in their promotional spam may be coupons, discounts, and free delivery services.
- Set Limits. Consider speaking with family members and close friends about a predetermined spending limit ahead of the holiday season. This is especially great for those doing gift exchanges. A price limit can help you, as well as others, stay within their means. If you normally draw names, do it early to provide more time to bargain hunt for that special item.
- Track Your Purchases. Once you begin the holiday season, keep track of all your purchases. Bring your gift list, along with your budget sheet, with you on every shopping trip. As you begin to purchase gifts and spend money, be sure to subtract the amount from your running Christmas budget total. This will let you know how well you are sticking to your budget and will make it easier to adjust between categories if needed. Tracking your spending is the biggest key to sticking to your budget.
As crazy as it seems to think of the holidays right now, good planning and preparation can make those holiday cost a lot more reasonable.
