Holiday shopping season is approaching, and retailers are already encouraging consumers to start buying.
Before the shopping gets underway, take a few minutes to create a plan.
Start with a total holiday spending limit. Then break that amount into categories such as gifts, food, travel, decorations and entertainment.
Next, make your gift list.
Assign a spending limit to each person rather than shopping first and adding up the damage later. This can make it easier to stay within your overall budget.
If you’ve been saving for the holidays, now is the time to see how much you’ve accumulated and compare it with your expected expenses.
Don’t forget about the costs that aren’t gifts. Travel, holiday meals, parties, shipping and even wrapping paper can add up.
One of the biggest ways to avoid overspending is to resist the pressure to make every purchase immediately. Compare prices, look for promotions and give yourself time to decide.
And be careful with “limited-time” offers. A discount isn’t really a savings if it causes you to buy something you hadn’t planned to purchase.
If you use a credit card for holiday purchases, keep track of the total as you go. Don’t focus only on the minimum payment. Know how much you’re actually charging and have a plan for paying it off.
You can even keep a running holiday spending total in your phone. Every purchase gets added to the list, giving you a real-time picture of how much you’ve spent.
Finally, remember that a thoughtful holiday doesn’t have to be an expensive one.
Homemade gifts, shared experiences, family traditions and time together can be just as meaningful as something purchased from a store.
The goal isn’t to avoid spending altogether. It’s to enter the holiday season with a plan—and enter the new year without a pile of unexpected debt.
