Planning for Holiday Spending

If you were smart, you probably started setting aside a bit of money out of each paycheck or each month to cover holiday gifts, entertaining and travel. Most of us did not think that far ahead, or were more worried about paying off last year's holiday bills. With fall upon us, what can you do to plan for holiday spending and not go into debt this year?

First, look at your budget. Do you have some amount of discretionary spending money? If you do, perhaps you should direct those funds into a holiday spending account starting now. You might also find that you can cut costs elsewhere in the budget. If you can eliminate just 25$ a week in miscellaneous spending in three months you will have saved more than $300 for Christmas gifts, travel and that great party all your friends expect.

Next, plan out your holiday spending, in detail. Consider your gift giving plans. Is this the year you can suggest that your family draw names for gifts or perhaps only give to the children? Are you still sending your ex mother in law a popcorn tin every year? Reduce your list to those gifts that matter, both to you and the person receiving them. Consider whether some of the people on your list wouldn't value your time more than money. Your grandmother might prefer a day of yard work to yet another basket of bath products. You might also talk with family members or friends about pitching in together to give a larger gift at less cost to each of you individually.

Make a gift budget. This is often harder than you might think and can make shopping more difficult. If you have a set budget, you know what you can spend for each person. Shop smart, taking advantage of sales and bargains to find good gifts at a reasonable cost.

Travel is another cost many of us have to fit into the budget at this already costly time of year. Can you share a ride with another friend or family member if you have a distance to travel by car? Consider using kayak.com or another competitive pricing service to reduce airfare and hotel expenses. Book early for the best deals.

Share hosting duties and costs to reduce the expense of holiday parties. Potluck dinner or plan for dessert only. Make sure that your party plans are worked into your budget.

If you have to use credit, budget out a repayment plan from the beginning and implement the cost cutting tips suggested here. The total cost of paying off your credit cards in January or February will not be too much more than paying cash, but the same is not true if you are still paying for Christmas in June.