"Dear Deborah,
The holiday shopping season is here and I don’t want to overspend (again) this year on Christmas gifts and activities. How can I stay in control of spending and not be saddled with credit card expenses well into the New Year? Any money tips?" -Rob
Having a budget is a key factor for spending wisely. Also, treasured gifts that appeal to the heart don’t need to be very expensive. Choosing a gift that shows thoughtfulness is a smart way to shop.
Here are eight ways to tighten up your holiday spending:
1. Involve others. Do you find that your gift list keeps expanding and has grown too big? This is probably true for others in your extended family. Some family members are on fixed incomes and, although they’d like to give lots of presents, are finding it difficult to do so. Many families are increasingly overwhelmed with their monthly bills.
This is a good time to help relieve the financial strain for you and others. Talk to your extended family about making a few changes to your traditions.
Begin by agreeing with others to cut down on gift giving. Agree on a dollar limit for gifts. Consider drawing names instead of buying gifts for each family member. Another option is to pool your money with another family member for more costly gifts.
2. Make a gift list. Set a budget on how much to spend for each person on the shopping list. Putting it in writing makes it easier to follow through on your intentions.
Next to the name of each person and the spending limit, write down gift ideas and clothing sizes. Keep the list with you when shopping to avert impulse purchase.
3. Shop early. Starting early gives you the advantage of finding the right gift for those on your list. Delaying shopping can lead to impulse decisions.
Some people like to shop throughout the year. They look for great gifts that are also bargains. My grandmother kept a gift box in her closet, adding to it throughout the year.
4. Comparison shop. Compare prices at different stores. The Internet has made it easier to research products and prices. Shop online or locally, making use of sales or discounts whenever possible. Some online retailers offer free shipping during the holiday season. Last-minute shoppers may not be eligible.
Keep your store receipts, including gift receipts. This makes it easier for exchanges later on, if necessary.
5. Don’t open new credit accounts. It can be tempting to sign up at the cash register for an immediate 10% or 20% discount. Don’t be swayed by retailer credit cards. They have a higher interest rate that often offsets the discount taken at the register. The discount often comes with a steep price later on, after the thrill of shopping is gone.
6. Pay in cash whenever possible. Pay cash at brick-and-mortar stores. This reduces the chances of overspending. When the predetermined money for gifts is gone, it’s time to leave the store.
7. Supplement gifts with service. Incorporate your time and talents. Add a valuable gift of service to the present you purchased. Create a certificate specifying the service.
Suggestions: For busy parents, give babysitting time. For tired caregivers, give a manicure or offer to help so they can have some free time. Older folks might want help with lawn care or home maintenance.
8. Celebrate the season with low or no-cost activities. Look for ways to make holiday events with others just as special as the gift exchange.
Attend Christmas concerts or programs. Participate in local events that are open to the public. Go sightseeing and enjoy the holiday lights and displays in the city park or on the front lawns. Go Christmas caroling. Have a Christmas play or program, having the children participate in the fun.
People may forget who the gift-giver was, but it’s not likely they’ll forget the experiences of commemorating Christmas.
Christmas can be more about celebrating the season with family. Despite what you may hear, one must not feel compelled to spend a lot on presents to create happy memories.
Copyright 2013. All rights reserved. Permission to reprint required.
Deborah Nayrocker writes on personal money management topics, showing others how to take control of their financial future. She is the award-winning author of The Art of Debt-Free Living and Living a Balanced Financial Life.
Publication date: December 2, 2013