by Terry Rogers
Shopping and picking out the perfect gift for your loved ones may be the highlight of your holiday season. Seeing the joy on a loved one’s face when they open the gift they have been waiting for or surprising them with something they were not expecting can give many people an adrenaline rush. However, no one wants to overload their budget or go into debt to buy those perfect gifts. These tips can help you avoid overspending. In fact, a SurveyMonkey survey found that 49 percent of Americans expect to spend about the same amount on gifts as they did last year while 36 percent planned to spend about the same.
The first thing to do in order to avoid overspending this holiday season is to create a shopping budget and stick to it. Create a list of what you spent on each person last year and see where you can reduce your spending. Be sure to include food, decorations or travel as part of your holiday expenses. Determine how much you plan to spend overall for the holidays and then assign an amount to each of the expenses you incurred last year. If you find you have more expenses than budgeted amount, cut back on some of them, such as reducing how much you spend on each person or eliminating some of the special foods you purchase or make during the holidays.
If you are planning to use credit cards, be smart about them. Cards that offer cash back or rewards are the best option for your holiday shopping but try to only charge what you can pay off completely the following month. The interest on a balance carried over from month-to-month will eliminate the cash back or rewards you earn. Limit what you buy for yourself during the holiday season. Instead, wait until the holidays are over to purchase decorations, clothing and other items that may be drastically reduced in post-season sales.
Consider discount gift cards which can be purchased at websites like GiftCardGranny or CardPool. These are sites where people sell gift cards they will never use for cash. The sites then turn around and sell the cards at discounts. A $50 Lowe’s gift card may be available at one of these sites for 15 or 20 percent off. The card is still valued at $50 but you save on the cost.
The most valuable advice for staying out of debt during the holiday season is to not overgive. The holidays create a feeling of generosity that makes you feel as if you have to spend large amounts of money on everyone on your list. If you have a talent for crafts, make your own gifts for loved ones. You can also suggest a name-drawing gift exchange in your family or at work to help you avoid having to purchase a gift for everyone. Chances are other family members will thank you for the suggestion as it will save them money overall as well.
You can also begin preparing for next year immediately after the holiday season. Many banks and credit unions offer Christmas savings clubs that allow you to put a certain amount away weekly, bi-weekly or monthly so you have funds at Christmas. Using a club like this helps you stick to your budget as the amount you need to put in savings is minimal, often $10 to $20 per week. Most financial institutions will even withdraw the funds directly from your bank account or paycheck as a convenience.
These tips can help you avoid high credit card bills in January while also allowing you to relax and enjoy the holiday season without the stress of debt.