Tips for Handling Holiday Spending and Post Holiday Bills
The holiday season is one of indulgence, from the wonderful meals on the table to the piles of presents under the tree. All that indulgence can be great, but holiday spending can leave us with a financial hangover that lasts well into the new year. Paying off holiday bills is a frequency cited source of stress, and it is all too easy to fall victim to the urge to splurge.
Take a look back
One of the best ways to get a handle on this year’s holiday extravaganza is to take a look back at last year. Take a look at how much you spent last year; this should give you a good idea of how much to budget for the coming year.
Be sure to include not only the actual gifts that were bought, but other holiday expenses, like meals, decorating costs, extra electricity to run those great Christmas lights, travel costs, the costs of holiday clothing, etc.
Prepare your holiday budget
With the figures for last year firmly in hand, it is time to set a budget for the coming year. It is important to make a realistic budget for the holidays, and stick to it. Setting a spending limit will help you focus on what is truly important without overindulging on toys and other gifts.
It is also important to look at creative ways to reduce holiday costs, such as making decorations, giving inexpensive but thoughtful gifts, and favoring intimate home get-togethers over fancy holiday parties. For those with large families, drawing names can be a great idea. Instead of buying smaller gifts for everyone in the family, each person simply draws a name and purchases a larger gift for only one family member.
Set realistic limits for holiday spending
One of the best ways to get a handle on holiday spending and holiday bills is to create a written gift list. Without a list of names, gift ideas and price ranges, you will be at the mercy of the impulse purchase, and the impulse purchase is the arch enemy of holiday budgeting.
Be sure to take your gift list with you whenever you go shopping. As each item is purchased, be sure to record the price and add subtract it from your overall holiday budget.
Watch the plastic
There is no doubt that credit cards add convenience to shopping, but they also add to the urge to spend too much. The rule of thumb with credit cards is to charge only what you can afford to pay off at the end of the month.
The best way to control holiday spending and avoid lots of post holiday bills is to use cash or checks whenever possible. When you pay cash you don’t end up with a big credit card bill, or interest charges down the line.
Plan your spending for next year
Christmas club accounts are not as popular as they once were, but they can be a great way to save money painlessly throughout the year. Saving a couple of dollars every week or every month can give you the money you need come next Christmas. If you followed the advice to review last year’s spending, and created a budget for this year, you should already have a good idea of how much you will need for next year. Simply divide this total by 12 for monthly payments and you will have a good idea of how much you need to save.