9 Holiday Budgeting Basics

Determined to master this year’s holiday budget without wiping out your bank account? The best defense is a solid spending plan. Here are some tips to help you ring in the New Year with less budgeting stress:

1. Set limits—If you’re trying to save money this holiday season, discuss setting limits on gifts with friends, family and coworkers. You may find that other people would appreciate spending a little less. Put a dollar limit on gifts, do a gift exchange, contribute to a group gift, or in lieu of gifts, donate your time to charity. 




2. Categorize your giftees—Make a list of everyone you want to give to this year, from your in-laws to your hair stylist. Then, put a dollar figure next to each name. Make adjustments until you have a total gift budget that’s doable. Set price limits to keep your holiday spending on track and  better focus your shopping online or in the store.




3. Price check before you buy—Found the perfect gift for your sister but it’s over your budgeted amount? Before you toss it in your cart anyway, price check the item on your phone. Many stores will price-match if you find a better deal.




4. Don’t procrastinate—When you wait until the last minute, it’s almost a given that two things will happen: (1) you will overspend, and (2) you will undoubtedly settle for gifts that aren’t ideal. And, let’s not forget about the added stress of trying to complete your whole list in a limited amount of time!




5. Monitor your spending—Pay close attention to your statements and daily charges. Use a credit card that rewards you with cash back or points for merchandise to make your spending go further.




6. Tap in to your inner creative side—A homemade gift is a great way to save money. It’s guaranteed to be unique and conveys a level of personalization that most recipients will appreciate.




7. Plan ahead for big-ticket items—If you want to do something big for someone special, keep this tip in mind for next year: automate! Save without thinking by setting up recurring transfers into a separate savings account. Done!




8. Avoid spree shopping—When you walk into a store, you generally have an idea of what you need to purchase—especially when it comes to gift shopping. You may even have a list—bonus points for you! Researchers have found that it’s actually much easier to keep spending once you’ve started. There’s even a name for it—the shopping momentum effect. Keep this phenomenon at bay by sticking to your list. If you feel the temptation to impulse buy and you’re about to go hog wild in the store, set your items aside (or hand them to a salesperson with the promise to return) and walk outside. Take a few minutes, or longer if you need it, to clear your mind. Then go back and review your selections for a better chance of purchasing only what you need.




9. Don’t forget shipping—More than likely, you’ll be doing some online shopping this season. When you’re planning your budget, be sure to factor in shipping costs to avoid overspending. Before you click the checkout button, do your research and look for free shipping offers or retailer coupons.