5 Tips for Holiday Budgeting!

I know you may be thinking that it’s too early to begin planning for Christmas shopping, but it’s not. I don’t know if you realize it but Christmas is just around the corner. How do you handle the Christmas buying season without blowing the budget? Here are a few tips to help make the process a bit easier.

Tip #1: Save early. I would suggest setting aside money each week to be used for Christmas gifts beginning this week. Create another item in the budget to cover these costs. I have used envelopes and savings accounts in the past to set aside money for these items.

Tip #2: Be a smart shopper. Do your research. Watch for sales and coupons that can be used to save on items you are going to purchase. Look for coupon codes that can be applied at checkout. Every little bit that you can save will be beneficial to your budget. Remember to ask for discounts. Some stores give military discounts, teacher discounts, senior discounts, etc. Just don’t be afraid to ask.

Tip #3: Set a limit. Set a spending limit for each person on your shopping list. I know this may be asking a lot from you, but make a wise choice and set a limit for each person. If you’re like most people, we have so much anyway that we really don’t need people to get in debt just to buy us a Christmas gift. I prefer spending the time with family and friends without the stress of everyone having to buy each other gifts. Choose to enjoy the time instead of the stuff.

Tip #4: Give time: Instead of buying each other expensive gifts, make a coupon or coupon book for gifts of “time.” One suggestion might be to give someone 1 hour of uninterrupted time going for a walk around the neighborhood or your local park. Another suggestion is to give someone in your family a “game night” in which you spend time with each other playing board games or card games. Again, this would be uninterrupted time where everyone turns off the cell phones and the iPads and puts the computers away. This one was tough for me but my family is more important than my time on the computer.

Tip #5: Consider the cost: Before making those holiday purchases, consider the long-term cost. Don’t use your credit cards to purchase Christmas gifts. It will take you much longer to pay them off than you planned. Paying cash is the best option.

Here is an example of the cost of using your credit card for these purchases. We will say that you make $1,800 in purchases and put it on your credit card at a 14.9% interest rate. If you pay $50 on your bill each month, it will take you 48 months to pay off the balance and will cost you approximately $600 in interest. If, instead, you pay $100 per month it will take you 21 months to pay it off and will cost you $300 in interest. Here is a link to a credit card payoff calculator: http://www.bankrate.com/calculators/credit-cards/credit-card-payoff-calculator.aspx?MSA=&&

Take charge of your holiday spending before it takes charge of you. Commit to paying cash for your holiday purchases!

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