John Cook
In today’s economy, the holiday season can be daunting. Spending on gifts, parties, food and travel is enough to blow even the toughest budget. Fortunately, you don’t need to be a financial genius or math whiz to have a great holiday season, no matter the size of your budget.
Start Early
The earlier you start your holiday planning, budgeting and shopping, the easier the holidays will be. It’s never too early to plan how much you want to spend. An early start allows you to spread out your spending or save a little more from your fall paychecks to make the holidays less of a financial burden.
Write Out a Budget
A written budget forces you to think through your spending before you shop. Write out each expense, from gifts to entertaining, and spread your income between them. You don’t need to assign things evenly, but it should add up to the total amount you wish to spend. Include a miscellaneous category for any expenses you miss. Keep about 10 percent of the budget in this category so last-minute surprises don’t break the bank.
Stick to It
Sticking to your budget is harder than making it, but having a goal for each expense will keep you on track. It may help to take a printed or written copy of your budget to the mall so you can compare the price of potential gifts to your budget. You don’t have to spend the exact amount you budgeted every time, but don’t go over by too much because the money will have to come from somewhere.
Update Your Budget as You Purchase Items
Putting in the true cost finalizes each expense and helps you estimate how much money you have left. Once you have the final costs in place, reassign the money left in the budget among the items you have left to purchase. Keep the total budget, including the finalized expenses, below the total amount you’re willing to spend, and don’t cut into your miscellaneous budget unless it’s something you didn’t see coming.
Stay Disciplined
Even if you’re updating the budget regularly and staying within your limits, it’s easy to get caught up in the commercial spirit of the holidays and over spend. Use the 24-hour rule to weed out fleeting desires. If you see something you want, then wait 24 hours. If you still want to buy it, then arrange your budget so you can do so.
Shop Around
Use the internet to comparison shop. Items can be at drastically different prices only a few miles apart, so search store websites for the best deal. Online retailers often offer free shipping for the holidays, and you may be able to avoid paying sales tax by buying online. These little savings add up and stretch your budget a little further each time.
The holidays are a wonderful time of year, but they’re not worth more than long-term financial health. Careful planning and self-discipline will allow you to have a holiday season full of cheer but without a huge credit card bill you’ll spend months paying down.
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