Say Bah Humbug! to Going Broke: Holiday Budget Tips

Just because the National Retail Federation says the average shopper this season will spend around $750 on gifts – along with décor and other seasonal and party goodies – doesn’t mean you have to spend that much.

 

Below are a few ways to stay within your specific budget, and to zero in on what you can really afford to spend this season.

 

Say “Bah humbug!” to going broke!

 

Identify your spending limit.

Financial education nonprofit ClearPoint Financial Solutions has created a nifty calculator to help you determine how much you should spend this season, http://video.bbb.org/clearpoint-holiday-tips/clearpoint-holiday-budgeting-calculator.html. Simply enter your annual income in the Holiday Planner Calculator and it will recommend a holiday budget for you. The organization suggests you spend 1.5 percent of what you make over the entire year during the holidays.

 

Divvy it up.

Got your number? To help you stay within that budget, you’ll want to attach a specific dollar amount to specific categories. This is an easy way to set aside your dollars, and to hold yourself accountable to your total budget for the season. Key categories may include: gifts, parties, travel, food and donations. Double check your list to make sure you’ve remembered

 

Track it.

It’s one thing to plan your holiday budget, and quite another to stick to it. Just like forgoing the pecan pie and sticking to your daily exercise routine helps you shed the pounds, you have to exercise some diligence to stay within budget over this festive time of year. To do so, use a simple spending worksheet, like this one, http://frugalliving.about.com/library/pdfs/HolidayGiftWorksheetbw.pdf, courtesy of About.com’s “Frugal Living” Guide. You can also create your own custom spending worksheet. This logs “budgeted spending,” “actual spending” and the “amount over or under” what you intended to spend for each item.

 

Modify.

Perhaps you can’t modify your spending limit (unless you somehow find yourself on the receiving end of a big windfall), you can modify how much you plan to spend by each category or item. A good plan will account for those changes. In other words, don’t freak out if you find yourself going way over budget in one area; simply scale back in another area to account for your overspending on some items or services.

 

Why spend when you can get it for free!

Some of the most insidious charges to creep up at holiday time, especially as the world now lives online, come from shipping fees. How many times have you spent more on shipping than the actual gift itself? The early bird doesn’t always get the worm when it comes to shipping. As the holiday buying season rages on, many online retailers and websites offer free shipping. Keep your eyes open for that. This can save you big, especially when you are shipping heavy items, such as furniture or electronics.

 

Consider long-term charges. 

We’re going to assume that your “spending limit” is money you are already have on hand RIGHT NOW. Keep your credit and department store charge card spending to the bare minimum. Or, you may find yourself in a situation where you are digging yourself out from under your holiday spending long after the turkey’s gone and the boxes are unwrapped. Don’t let the repercussions of going over budget or “charging it!” when you don’t have that money to spend in the first place follow you into the new year.

 

The sooner you get your holiday spending under control, the faster you can get back to actually enjoying the holidays.

 

Happy budgeting, and happy holidays to you!