Tips for taking charge of your holiday spending

The holiday season can be a financially challenging time. In addition to the cost of gifts for friends and family, many people have extra expenses for travel, entertainment, food, decorations, tipping, charitable gifting, and utilities. The holidays don’t need to cause financial stress.

This year, while there is still time, take these steps to reduce your stress, expenses and regrets:

Create a holiday spending plan—Include gifts, of course, but also hidden costs of gifts such as wrapping and shipping. Also factor in other expenses noted above. A great online Holiday Spending Worksheet is available at www.bankrate.com/calculators/savings/holiday-spending-calculator.aspx.

Match expenses to income—Determine how many paydays are left from early November through mid-January. Then match holiday spending to your income, including any year-end bonuses, so expenses are paid with current income. For example, if you have $900 of holiday expenses and six paychecks, you’ll need to set aside $150 per paycheck.

Play the float–Time charges on credit cards so bills can be paid in full when they arrive. For example, if your statement ending date is the 3rd of the month and you buy things on the 5th, you may have six or seven weeks before payment is due.

Use credit cards wisely–Don’t charge more than you can repay. A bargain isn’t a bargain when interest is added to a purchase. Check your account statements to make sure all charges are correct and avoid unnecessary expenses such as late, over-the-limit, and cash advance fees and penalty APRs.

Make a gift list–List the names of people/families receiving gifts and determine a monetary value for each gift so the cost of all gifts stay within your overall holiday plan. Then stick to the list. For a helpful worksheet, see www.vertex42.com/ExcelTemplates/christmas-gifts-budget.html.

Look for bargains—Specific strategies include deeply discounted online deals with free shipping, online and print coupons, “door buster” sales at certain hours, and high-end thrift shops.

Set realistic expectations–If your budget is tight, have a conversation with family and friends about ways to cut back. For example, consider replacing individual gift-giving with drawing names and buy one nice gift rather than many gifts.

Make a gift–Homemade gifts show thought, effort and love. Consider baked goods, fancy pillowcases, photos, artwork and embroidered, personalized items. “Gift certificates” for car washes, pet-sitting, house-cleaning, or baking are also appreciated and “White Elephant” exchanges are fun.

PowerPay your debt—If you run up an outstanding balance, use the free online Powerpay program to pay it off quickly. Powerpay at www.powerpay.org generates a debt repayment calendar. As soon as you pay off a debt, you apply its monthly payment to another, generally starting with the highest-interest rate first.

Start now for saving for 2019–Open a “Holiday Club” or similar savings plan with a financial institution or through an employer-related credit union. The make regular deposits throughout the year. Come Fall 2019, you’ll have the money you need without the stress of having to cut spending or use credit for purchases.

Now is the time to take charge of your finances to get the most out of the upcoming holiday season without financial stress.