Ten Tips to Survive the Holidays Without Going Broke
A little budgeting during the holidays can save you from financial disaster.
Many people get carried away during the holidays. In fact, consumers spend more money in the three months before New Year's -- on presents, travel, and entertaining -- than at any other time of the year. And much of that buying is done on credit, which can lead to major debt problems for months or even years to come. To keep your cheer intact before and after the holidays, we've compiled a few tips that will help you be generous without inviting disaster.
Shopping Tips
If you want to save money, this is the time to make your resolutions -- not after the New Year.
Cut your gift list. The easiest way to reduce how much you spend during the holidays is to exchange gifts with fewer people. You might even talk to some people in advance and agree that you won't exchange gifts but will get together to do something you both enjoy -- such as taking a stroll downtown to see the holiday lights.
Find alternatives to purchased gifts. Be creative with alternatives to purchased gifts. Homemade treats, a coupon for your services (such as babysitting), pre-addressed and stamped envelopes so an older person can easily keep in touch, a family photo, or a tax-deductible contribution to a charity are all thoughtful gifts.
Make a budget. Once you've figured out who you want to buy gifts for, determine your overall budget and decide how much you want -- and can afford -- to spend on each person. This will help you avoid the temptations of last-minute impulse buying.
For information on budgeting in general, see How to Make a Budget and Stick to It.
Spend within your budget. Stick to your budget. This takes tremendous discipline, and you may want to enlist help. Shopping with someone who can provide the voice of reason is the best way to keep from overspending.
Get started early. Good deals are often available before the official holiday shopping season starts on the day after Thanksgiving. Prices are usually lower, you have more time to take advantage of mail order bargains, and you can find some great deals on models that are being phased out toward the end of the year.
Look for good gifts that are also good buys. Learn about the features and options available on particular products, especially expensive items such as cameras, video equipment, sporting goods, stereos, and computers. Read up on different makes and models so you won't be swayed by the more costly recommendations of zealous (and commission-hungry) salespeople.
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