Budgeting Tips

Make a Plan For Your Spending

With the Christmas season fast approaching shoppers are making their lists. Savvy shoppers plan for their holiday buying. They create a budget, save throughout the year, avoid credit, and stick to their plans. Yes, making a budget and sticking to it can be a real kill joy during the holidays, but it's vital to keep your financial house in order. Here are some tips offered by smart shoppers.


Start with a realistic idea of how much you can spend on all your holiday purchases. Make a list of your regular expenses for the holiday months, then add to them costs for gifts, entertainment and travel. Then add up all the expenses, does your regular paycheck cover them all ?

If you don't set a dollar limit, your spending will continue to grow.. When January comes around you'll be shocked to see what you spent. In January you'll be horrified by how much you've spent. Unfortunately people feel pressure to buy gifts and what they spend is a measure how good a person they are.

Know Your Spending Limits

Most of us cannot afford to shop carte blanche, but we do it anyway. Decide ahead of time what you can afford to spend on each person on your list then save your receipts as you shop. STOP when you reach this limit. If you find you are limited on what you can spend this year, set a priority for those whom you really wish to buy for. You might even discuss it with friends and family, and explain you won't be able to exchange gifts. That will avoid the awkward situation of having a gift bought for you and nothing to exchange. Ideally you should be able to pay off holiday purchases within two to three months after the holidays.

Keep Track of Your Spending

Okay, so now you have a spending plan, but if you do not keep track of what you have purchased and stay within your plan, you wasted your time. Record everything you spend on cards, wrapping paper, postage, food, clothing, and even decorations. You will be surprised host fast these costs will add up. If you don't keep track they will quickly surpass your budget.

Stick To Your Shopping List


You made a shopping list... use it ! Plan your shopping by stores, don't wander or window shop. Make your purchases and leave. This has the added advantage of saving you considerable time and avoids impulse buying.

Avoid Last Minute Shopping


Shop early, the best time to shop for Christmas is from Oct. 1 and Dec. 1. Avoid the holiday shopping crowds and allow time for comparison shopping for the best deals. A last minute shopping spree does nothing but exhaust you and forces you to make poor purchasing decisions to save time.

Research Your Shopping - Compare


If you shop early and take time to comparison-shop, you will stretch your budget further and either save cash or be able to purchase for more people on your list. Avoid the urge to complete your shopping quickly. Watch advertisements in your paper, make use of coupons, or research the Internet. Doing so will help find the best deals. I know this is easier said than done, but force yourself to take the time and it will be payoff after the holidays when you still have bills to pay.

Pay With Cash, Leave Your Card At Home


Probably the best tip is to make your purchases with cash and leave your credit cards at home. This all but eliminates the temptation to over spend on a gift and you won't be tempted by hookers at the shopping mall. According to Consumer Credit Counseling Service, shoppers will spend as much as 30-40% more when shopping with credit cards. If you do use credit cards, a neat trick is to deduct each purchase from your checking account register. That way when the credit card bill arrives, the money is still in your checking account to pay the balance.

Limit Your Credit Card Use


Try to limit your charges to just two credit cards, and if possible use those cards with the lowest interest rates. Most department store credit cards have high interests rates, don't use them if you can avoid it. The more cards you use the more difficult it will be to keep track of your expenses.

Avoid the Hype, Avoid New Card Offers


Retailers and credit card companies know that you are most susceptible to purchasing pressures during the holiday seasons. Resolve yourself to avoid signing up for new accounts or no payment for day offers. Those rack up interest fast and you'll blow your carefully planned budget before you know it.

Borrowing To Spend


Probably the worse thing you can do is borrow money for your holiday purchases. Credit cards are a form of borrowing, but taking out actual cash advance loans or installment loans from your bank will absolutely wreck your budget. These are high interest loans with high penalties for late payments. If you know in advance you will be short on cash for the holiday consider picking up a part time job. The Christmas season typically sees an increase of 20-30% in retail staffing.