Tips on keeping your holiday spending in check

Did you know December 15th, is considered the busiest shopping day of the year?


The holidays are here, and for many of us, so is holiday stress. Gift buying, decorating, eating out, and entertaining can be fun, but they can leave a serious dent in your budget. How do you find the right balance—sharing the joy of the season without going overboard? These seven holiday shopping and spending tips can help keep your holidays merry and your financial plan on track.

  1. Know your limit. It’s easy to get caught up in the spirit of the season only to find that you’ve given more than you intended or can prudently afford. That’s why it makes sense to set a gift-giving budget and then stick to it. You’ll also want to do a quick check to make sure your holiday spending is in line with your overall gifting goals for the year.
  2. Make a list, check it twice. Next, make a list of the people you plan to buy gifts for this year. Whether that list consists of four people or 40, decide how much of your total budget you want to allocate to each person. If your list is longer than your budget, consider ways to cut down on the number of gifts you give. For example, if you have a large family, try drawing names and giving one gift to just that person. You may find this results in fewer but more meaningful gifts.
  3. Get a head start. It’s much easier to stick to a budget when you’re not waiting until the last minute to shop. Procrastination only promotes rushed shopping, overspending and buyer’s remorse as the guilt of going off-budget sets in. Begin shopping early enough to take your time and make smart choices. But before you head out the door, be sure to take your list with you. That way you’ll be far less likely to buy on impulse, which means you’ll also be more likely to stick to your budget.
  4. Broaden your definition of giving. Because most of us want to present something wrapped up with a bow, we tend to overlook gifts of energy and time. Yet both can have more lasting meaning. For example, soup kitchens, homeless shelters and family service organizations all offer opportunities for young people and their families to help others who are less fortunate, especially at the holidays. These acts of volunteerism and kindness can teach children an important lesson about the value of giving from the heart. The same is true for family members’ gifts that are handmade or involve a sharing of time and talents. For example, use your talents to bake some holiday-themed cookies, your computer talents to create a scrapbook of family photos or your handyman skills to build a birdhouse. Similarly, give the gift of your time by offering to wash a family member’s car once a month for the summer, do an afternoon of yard work or teach a loved one how to use a new computer application.
  1. Build lifetime memories. Similarly, consider giving loved ones gifts of experiences, not things. These can be a coupon for a special outing or activity together, tickets to a sporting event or concert, plans for a family vacation, membership to the gym or a museum—whatever would have special meaning to your loved one.
  2. Put the brakes on. Once you’re in the habit of buying expensive gifts, it can be difficult to change course. Yet lavishing too many such gifts, especially on children, may lead to unintended problems, including a sense of entitlement, overstimulation and lack of gratitude. Instead of being over-zealous, decide on a set number of gifts for each of your children. There are no hard-and-fast rules for how many presents are “right”; every family is different. But whatever number you decide, stick to it. If you find that you overbought, choose the most meaningful gifts in your “stash” and return the rest. As long as you tackle the task of sorting through the overload within 30 days of buying the gifts, you shouldn’t have a problem returning them.
  3. Track spending. In the heat of the holiday shopping rush, it’s easy to lose track of how many times you pulled out the plastic. Before the credit card bills come rolling in, document how much you spent and where. You can tally up your purchases using your store receipts, or you can review your credit card purchases online. Consider downloading one of the many free mobile holiday budget apps that are available for iOS and Android phones. These let you track spending whether you’re writing a check, paying cash or using a debit or credit card.

Downsize your holiday spending, not your holiday joy. By spending less time stressing over gifts, you’ll free yourself to enjoy the family, friends and traditions that make this time of year so special—and you’ll do your budget a favor in the process.


Source: Northwestern Mutual

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