manage your budget

It’s that time of year when spending money and holiday cheer seem to go hand-in-hand. But maintaining high spirits can be daunting when you’re facing a broken budget and more people to buy for than you can afford. Don’t throw in the wrapping paper yet, there are ways to navigate holiday spending without ending up in debt in the new year. It’s important to do everything you can – especially during the holidays – to avoid getting too deep in debt when it’s too late to start a debt management plan. Here are some tips that will help:

Budgeting

It may seem obvious, but creating a solid budget is essential to avoid overspending and falling too deep in debt through the holidays. Some financial experts advise trying the zero-based budget, which means starting with your monthly income and subtracting all expenses from it until you get to zero. Don’t forget to add in all Christmas expenses, including decor, holiday meals, gifts, wrapping paper, and more. This allows you to see where every dollar is being spent.

Another way to budget? Decide who you’re buying for and how much you plan on spending on each person. Once that’s established, you can shuffle numbers around as needed—taking into account discounts, coupons, and sale prices. To be truly proactive, set up a holiday fund at the beginning of the year so that by the time December arrives, you’ve amassed enough money to comfortably buy friends and family gifts without breaking the bank.

One big way to avoid incurring debt is to limit how much you put on credit cards. Using cash or a debit card is a good way to keep your spending under control so you never spend more than you have.

Shop Savings

Experts suggest that the best time to shop for the holidays is from Oct. 1 to Dec. 1, which includes big sales days like Black Friday and Cyber Monday. Look out for other deals going on in stores around you or online, including shopping coupon codes, signing up for alerts from stores for email discounts, or comparison shopping; many places will price match if a retailer is selling it cheaper.

Modify Gifting

There’s no shame in setting price limits on how much to spend on gifts when exchanging with friends or family, especially when you have a large circle. This way, everyone spends the same amount and you won’t be pressured to overspend. Gifting a family with one gift everyone can enjoy instead of spending on individual gifts can also help you keep hold of the reins on your budget.

Limiting the number of people you have to buy for by doing a Yankee swap or just dropping names in a bowl and choosing one can also go a long way toward conserving dollars. Regift unused items still in boxes or bearing tags. You won’t spend a dime and you get the added bonus of decluttering your house—just make sure not to regift to the initial giver!

Finally, never underestimate the joy people feel when they’re gifted with something homemade. Crafty gifts are unique and inexpensive ways to show how much you care during the season.

Keeping to a budget and finding ways to save money during the holidays will make it less stressful so that you can truly enjoy your time with friends and family. However, if you find that you’ve overdone it and are anxious about heading into a new year with massive credit card debt, let the professionals help get a strategy in place to help you avoid these financial pitfalls. Speak with a credit counselor and look into a debt management program. Counselors can help you consolidate your credit card debt and lower your interest rate so that you can begin the year heading toward a brighter financial future.


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