Holiday Money Management

The holidays are approaching fast and with them come parties, gifts, family gatherings, Eggnog, and potentially maxed-out credit cards. Make sure to start out 2009 debt-free by keeping your holiday budget in check with these simple tips.

Look at old credit card and bank statements to see how much you spent last year. This amount should include all holiday expenses such as cards, gifts, food, wrapping, shipping, travel, etc. Was that amount reasonable or excessive?

Create a list of all the gifts you need to buy indicating how much you will spend on each one.

Create another list for all the additional expenses that usually pop up during the holidays.

Add the totals of the two lists. The sum is your new holiday budget. Compare it to last year’s expenses and adjust it accordingly; if this year’s holiday budget is higher than last year’s excessive spending, then you may need to cut it down. 

Set spending-limits with family and friends to help reduce your budget. Another option is to plan to exchange homemade gifts with your loved ones. After all, it is the thought the counts.

Try to pay for everything in cash; it will keep you from overspending. If you prefer having a paper trail, or shopping online, select one credit card and use it for all your holiday shopping. Make sure to charge only what you can afford to pay back after one month… max two. 

Start shopping early. This will give you plenty of time to budget and shop around for the best deal. Plus, you’ll avoid the last-minute-shopping-pressure which usually leads to impulse buying.

Take your list with you to the store; it won’t do you any good sitting on your kitchen counter, or on your desktop. Follow it closely. Do not buy an item if it’s not on your list.

Keep a record of how much you spent on whom and on what. Use an excel sheet to track your expenses. This will come in handy when preparing next year’s budget.

Happy shopping!