10 Ways to Keep Your Holiday Spending in Check

By Michelle Pastor, Accredited Financial Counselor

The holidays always create a frenzy of shoppers buying presents at a feverish pace. But once the gifts have been unwrapped and life returns to normal, the credit card bills start to stream in and the post-holiday hangover feeling plagues those shoppers that spent more than they could afford.

Everyone vows that this year they are going to shop early and stay within their budget; but to avoid the post-holiday hangover they need more than just good intentions. They have to make a plan for holiday spending and stick to it.

Here are some tips to keep holiday spending in line:

Eliminate impulse spending. NOW is the time to set a cap on how much you can afford to spend on your holiday shopping. Create a spending plan for each person on your list, set limits on the dollar amount per gift and list some gift options. It’s very important that you stick with this plan to avoid impulse spending.

Draw names. Suggest drawing names within a large group of family or friends so you only have to buy one gift. Others in the group may be thrilled that you brought it up first.

Get creative. If you have a bunch of members from one family on your list, opt to buy one gift that the entire family can use rather than a gift for each member of the family. A board game or a restaurant gift certificate will cost much less than a number of individual gifts.

Think before you buy. Spend some time coming up with a gift that will truly be appreciated. Don’t fall into the trap of thinking that the more you spend on a gift, the more the recipient will enjoy it. It really is the thought that counts.

Create gifts rather than buy them. Couples with children appreciate babysitting certificates or errand-running vouchers. Grandparents may enjoy a trip with you to a local attraction, a certificate for car washing done by hand, house cleaning or even gardening. Give a friend on your list a home-cooked meal delivered to the door. A gift of your time can be much more valuable to the recipient than any gift you can buy from a store.

Use catalogs. Catalogs are a great source of information when deciding what gifts to buy and a convenient way to comparison shop. They also allow you to avoid the temptation of impulse purchases because when you’re shopping from home it’s easier to take your time and really think about what you’re buying. Be sure to factor in any shipping costs and to order early enough to receive the gift in time for the holidays.

Plan a fact-finding trip before you buy. Plan a trip to the mall solely to compare prices and to find options for gifts. Don’t bring cash, credit cards or a checkbook on this outing. Wait a few days to go back and buy the gifts once you’ve decided where the best values are.

Enlist the help of a friend. Take a thrifty friend shopping with you and ask him/her to help you stick to your spending plan. Your friend can act as a voice of reason when you’re surrounded by temptation.

Trim your cards and postage costs. Cut your holiday card list to only those friends and family that you won’t get to see over the holidays.

Use your medical reimbursement account as a holiday savings account. Plan ahead for next year! Pay cash for your prescriptions and doctor visit co-pays throughout the year and don't submit the medical reimbursement paperwork until October or November. This way, when you get your reimbursement check you can spend it on holiday gifts because you've already paid the medical bills. Be careful, though, and don't save more in your medical reimbursement account than you'll need for medical expenses during the year – if your actual medical expenses are less than the amount you estimated, you'll lose the extra!

© Copyright 2006 by the author. All rights reserved. Used with permission.