How to Survive the Holidays without Wiping Out Your Savings Account
Published 11/19/10 (Modified 3/8/11)
This is a guest post from Jesse Mecham, founder of You Need a Budget
It's almost that time of year again. I'm not talking about gingerbread houses, cocoa, and caroling; I'm talking about shopping, impulse-buying, digging ourselves into more credit card debt, and raiding our savings accounts.
We undoubtedly lose a bit of sanity, self-control, or both when it comes to holiday spending. For most Americans, the nature of the season already implies we'll part with our money quicker than Santa can shoot up a chimney. The key, however, is not to spend it out of desperation, impulse shopping, or simply because you don't have a plan.
Plan spending ahead of time
Your biggest safe-guard against excess or unplanned holiday spending is (are you ready for this?) making a plan.
This means you actually create a budget...and stick to it. Decide how much you're willing to spend and then decide what you're going to buy from there. The more items you decide on ahead of time, the better. This saves you from making a decision in the heat of the moment, surrounded by all those shiny, new things, and potentially can keep you from overshooting your budget.
This will take some sleuthing on your part, but the research will pay off and keep money in your pocket. Once your list is made up and in your hand, it'll be so much easier to avoid those impulse buys.
Work to build up your holiday budget a little each month throughout the year. Using cash you already have will reduce your "spending stress" dramatically and help you stay more committed to working within that allotted amount. Let the plastic sleep snug in your wallet and you won't be holding your breath for that credit card statement, come January.
Find great shopping deals
With these components in place, you're prepared to take on the holiday madness of the stores. So the next question is: Where should I shop?
The answer's simple: Make wise spending decisions. You want to buy a new outfit for the baby? That's fine. But does it need to be designer, boutique, or made out of some ridiculously expensive fabric? The kid is going to grow out of it in a month. My point is, weigh the importance and the significance of that item. Will they remember or use it three months from now?
Lastly, remember that it never hurts to shop discount. Hit up the dollar store, thrift store, or local outlet as much as possible. They're a great source for simple, quirky gifts, not to mention all those holiday extras you'll need, like stocking stuffers, gift wrap, or party decorations.
Holiday shopping can be naughty or nice, depending on how you prepare for it. Create a budget, keep your list close at hand, and make sure your purchases are really worth it. Do this, and you might actually have time to relax and enjoy the holidays.