Have a plan
Christmas is not an emergency; it happens every year, so have a plan! Don’t use this as an excuse to overspend and buy things you can’t afford. In your Set boundaries. Remember, you can’t buy everything for everyone. Yes, Christmas is a time to show people your concerns, feelings and gratitude for them. It’s easy to use expensive gifts to express sentiment, but it’s important to set a realistic budget ahead of time.
Create a budget and a list for holiday spending and gift giving in advance of buying. Include possible gifts, dollar amounts and alternative choices. Don’t forget expenses like holiday decorations, wrapping paper, cards and postage, plus extra food costs for parties and family gatherings. Knowing how much you can truly afford to spend is a crucial to controlling costs. Establish spending limits for each person on your list and look for bargains early. Get organized as early as you can, and include prices on your list so know how much you’re on track to spend. Have the gift list with you when you shop to avoid impulse purchases.
Avoid credit cards
Attempt to pay with cash and limit using credit cards. Charge cards tend to encourage more spending than what’s budgeted, and we can get a shocking surprise when the credit card bills arrive in January or February. In addition, over spending via your credit cards will mean interest payments on top of what we spend. Your goal should be to begin the New Year with no new debt as a result of holiday spending. Check out www.mychristmasbudget.com for a free online budgeting tool.
Take advantage of shopping early to find better deals, and avoid last minute purchases that can be costly. Use coupons and look for sales and clearance items. Take advantage of stores and online sites that offer free gift-wrapping and shipping services. If you need to mail gifts, do so early to keep shipping costs down. To save on children’s gifts, head to flea markets, yard sales and consignment stores. Many toys and games can be found in their original packaging for much less. Liquidators, buying clubs and factory outlet stores usually offer lower prices. Bulk buy with other family members or friends to yield savings. And shop at off-peak times such as early morning or mid-week to avoid crowds and pressure.
Research & keep track
Online auctions such as eBay are great places to find bargains, but be aware of how much similar items cost at retail. Many retailers have clearance sections on their shopping sites where you can save big. Shop prices before committing to a purchase. Don’t buy from the first store; take your time and really look around. Utilizing the internet and other comparison shopping engines via your phone or other mobile devices will help you find the best deals. Keep an eye on brochures and discount coupons to help you save.
When making online purchases, have you ever spotted those little areas where you can enter a promotional code, discount code or coupon? That’s a sign to open a web browser in another window and do a quick Google search for the retailer’s name along with the same catch phrase used on that retailer’s website. You could find a coupon code in seconds and save on the purchase you’re about to make.
Don’t go through all of the trouble of creating a budget, making a list, researching prices and shopping around, only to lose track of your progress. Be diligent about tracking your progress by recording all of your shopping and holiday-related costs. Being informed about your financial situation is the key to being financially healthy.
If you have a skill or hobby, consider making some of your gifts. Use jars, tins, boxes and craft bags with pretty ribbons and trims to make a nice presentation for your hand-crafted gifts. Use last year’s holiday cards as gift tags and the Sunday comics to wrap children’s presents. Consider gifts of your time, such as planting a garden, doing carpentry or plumbing work, or pet sitting for a long weekend for your relatives and friends. Make more of your gifts at home. Handmade craft items, special desserts or breads and other “goodies” can help stretch a holiday budget. Replace traditional greeting cards with paperless e-cards and electronic mail. Take a photo of your family and send that electronically with a personalized message or use one of the many eCard services online! Try to save gift bags, decorations and other reusable holiday supplies. Give gift certificates for your services. Such services could include babysitting, running errands, cooking a nice dinner, doing handyman work, repairing or detailing a car, or helping someone build a website, to name just a few possibilities.
It is tempting to make unplanned purchases during the holidays. We are inundated with holiday displays and merchandise beginning in early October. There is constant pressure to spend, and advertisements convey that the more expensive and extravagant gift you give the better. Stores set up their holiday displays as triggers for you to spend more. Giving in to these pressures is an emotional reaction but a powerful one. Being well rested and nourished when you shop will help you stick to your budget and avoid merchandising triggers. Try to avoid running around on your lunch hour or evenings after work to do the bulk of your shopping. This can be exhausting and stressful. Purchase gifts online or through catalogs to help you save time and money while avoiding stress and impulse purchases.
Having a plan before the Christmas season “happens to you” and following that plan will help you survive the holiday financially and I pray give you fiscal peace. The benefit of employing even a few of the tips discussed can be worth a lot of money and stress. It’s important to maintain your financial disciplines, improve your financial health and enjoy the holidays. Merry Christmas!
Jeffery Masters, president of Jeffery W. Masters & Associates, can be reached at 954-977-5150. Securities offered through LPL Financial, member FINRA/SIPC. Investment advice offered through Independent Financial Partners, a registered investment advisor. Independent Financial Partners and Jeffery W. Masters & Associates are separate entities’ from LPL Financial – Jeffery.Masters@LPL.com. Jeff is a locally endorsed Investment Advisor by Dave Ramsey, who is not affiliated with LPL Financial.