Every year, our credit counseling services get busy because consumers who overspend during the holidays resolve to conquer their debt. We’re glad to hear from them, and we’re always here to help, but we want to warn people to think ahead and budget for the holidays before they need to contact us for debt management help.
With that in mind, here are 21 tips for smart spending during the holidays:
- Create a written plan for holiday spending and gift giving. Include possible gifts, dollar amounts, and alternative choices.
- Establish spending limits for gifts for each person on your list and start looking for bargains early.
- If it has been a challenging year financially, you need to shrink your holiday gift list. Begin by talking with those you exchange gifts with, perhaps suggesting not exchanging gifts or mutually observing much lower dollar-limits on gifts.
- Separate shopping trips (when comparing prices, quality, value, etc.) from spending trips (when making a purchase), and resist taking cash, credit cards, or a checkbook on the shopping trips.
- Wait for those sales! Increased food and energy costs this time of year could bite into holiday sales, so sales and clearances could come earlier than usual.
- Watch the advertising and sale flyers for items you intend to purchase.
- Ask retailers when the items you are interested in buying are coming on sale. Retailers may reveal sale dates because they don’t want you to shop their competition.
- Sometimes shopping later in the season (for smaller gifts, wrapping and accessories, etc.) will allow you to take advantage of clearance sales. It will often yield lower prices overall. If holiday sales are sluggish, discounts and clearance sales will appear earlier.
- Liquidators, buying clubs, and factory outlets stores usually offer lower prices.
- Bulk buying with other family members or friends can also yield savings.
- Spend cash and avoid using credit cards. Charging purchases tends to promote indiscriminate spending. Credit card users often say they had no idea how much they spent on the holidays until the credit card bill arrive in January or February of the next year.
- WARNING: credit cards have a message: SPEND!
- Sometimes writing checks can get out of hand especially when you fail to record each check or calculate the balance after writing a check, often resulting in overspending.
- Giving gifts to adults on New Year’s Day is very special. You can really take advantage of all those after-Christmas sales.
- Consider gifts that don’t cost a lot of out-of-pocket money. Giving a card to a young family, which entitles them to emergency baby-sitting time, for example, will result in savings for both families. Laundry or shirt-ironing for a bachelor, a bimonthly sight-seeing outing or gardening, housecleaning, and car washes for grandparents are useful and often much needed gifts.
- If considering a part-time job over the holidays, perhaps working for a department store or other major retailer, you could economize with an employee discount in addition to getting early information about upcoming sales.
- At office parties and other holiday functions where you might be asked to provide a gift, suggest that instead of gifts; bring canned food for the homeless or disadvantaged.
- Save more on holiday greeting cards and postage by sending only to those in your life you won’t see over the holiday.
- Make more of your gifts at home. A freshly baked loaf of bread, cookies, desserts, etc. are always appreciated. Also arts crafts, needlework, or a collage of photographs.
- Instead of giving money, especially to younger children, give U.S. Savings Bonds. They cost one-half of the face value, will not be immediately spent, encourage savings, and, because they are interest bearing and tax-free until redemption, the gift keeps on giving.
- Gift-wrapping of larger gifts and incidentals can become costly. It is easy to economize; give a card with a photo of the larger gifts; use newspaper, magazines, grocery and shopping bags as gift wrap, or reusable gift boxes, etc.
We want the holidays to be a happy time for every consumer. Take note of your spending this year and use what you learn to plan ahead for the next holiday season.
Remember, if your spending leaves you with a holiday hangover, call us for free counseling or get started online. Look for more free tips and advice in our FIT Academy, including our “Surviving the Holidays” course material.
Editor’s note: this is a revised and updated version of a previous post.
