Making the holidays affordable

Photo:

Susan Graves

With the joy of the holidays comes the stress of over spending. Many families use credit cards to check off everything on their holiday shopping lists, and end up starting off the New Year in debt.

But not to worry. You can make this year debt-free by creating a holiday budget and sticking to it. Below are some tips for planning ahead to avoid the January bills-are-due blues:

• Determine the spending amount you can afford.

Only you can decide the amount you can afford to spend on the holidays.

• Take a look at expenses.

Make a list of everything you need to spend money on over the holidays including gifts, wrapping supplies, cards, postage and travel. Estimate how much each will cost and add them up. It is likely that this number will exceed your budget; if so, it is time to start cutting back.

• Make a list of the persons to whom you wish to give a holiday gift.

Once you’ve determined what you can afford in total, set limits for the amounts you will spend on each person.

• Do your research.

Many retailers are offering holiday deals, but it's always a good idea to comparison shop. Online prices may be better, but don't forget to factor in shipping costs.

• When you begin shopping, take along your list.

Your list should include how much you budgeted for each item and stick to that price range. If you overspend in one category, cut back in another.

• Use your experiences this holiday season to prepare for next year.

Look at the total amount of money they spent to get a more realistic plan for next year.

• Christmas Club Accounts

One way to budget for the added expense of gifts, food and decorations over the holidays is to take advantage of a Christmas Club Account. This budgeting tool is provided by credit unions and banks and can make the holiday season easier on the family finances.

The concept of Christmas clubs is simple: deposit money every week or month throughout the year into a Christmas Club Account and at the end of the year, the money is given back for Christmas shopping.

While you may be able to do this on your own, many people do not have enough discipline. Your financial institution can most likely set up an automatic transfer into a Christmas Club account from your Checking or Savings account and additional deposits can be made at any time.