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Control Your Holiday Spending

Man's hands holding wrapped gifts

Festive holiday advertisements and store promotions would have you believe that this season is the best time to score shopping deals. In some cases, that is true. But many retailers count on deep discounts on specific products to hook shoppers who will also buy higher-profit items.

Unplanned purchases and impulse buys during the holidays aren’t always bad, as long as you keep your budget in check and try to save extras for last. But many Americans shop without a plan, making them vulnerable to holiday deals and sale signs that could get the best of them.

When you shop this season, follow these 8 tips to avoid going overboard on holiday spending.

Set a Budget

Start with creating a budget that works with your plan and your wallet. Write a list of all the people you want to buy for and set a dollar amount for each person. (Don’t forget smaller items such as stocking stuffers.) Your list might include:

  • Family members
  • Friends and neighbors
  • Co-workers
  • Service professionals (mail carriers, trash collectors, hairdressers)
  • Your children’s friends and teachers

Be Selective

Once you have purchased a gift for someone, cross them off your list. Avoid adding last-minute impulse items just to make your gift seem more meaningful.

Do Your Research

Make sure you know when and where the best deals will be.

  • If a big-ticket electronics item is on your list, check prices online before heading to the store. Some retailers offer coupons and special deals on their websites.
  • For items priced around $100 or less, the best specials might be the week before Christmas.
  • Search through circulars in the holiday papers and look for coupons on the Internet before tearing through the stores on big sale weekends.

Resist Temptation

Buy what you came for—then leave. Also, don’t worry about stores selling out of items. Most likely you will be able to find a similar gift somewhere else—perhaps even cheaper.

Skip the Store and Shop Online

You’ll save on gas, parking fees and child care, and you can shop any time day or night. Just make sure you:

Factor in Extras

Beware the hidden costs of the holidays. Gift wrap, holiday cards, wrapping supplies and mailing costs all add to the price of your gifts.

Pay with Cash

Leave the credit cards at home and only spend as much cash as you have allotted in your budget. This is the best way to stay in your holiday spending budget. If you don’t have the cash, you can’t afford it.

Consider Alternatives

There may be less expensive gifts that can be just as meaningful as store-bought items. Consider these alternatives:

  • Handmade gifts such as crafts, baked goods or music playlists.
  • Instead of giving gifts to friends, arrange a potluck dinner or dessert gathering. You’ll be surprised at how many people will appreciate the money savings and the time together.
  • Secret Santa: Ask the adult relatives in your family to buy one big gift for a select person rather than everyone buying gifts for everyone else. Each person chooses a name out of a hat and buys only one gift.

[Any reference to a specific company, commercial product, process or service does not constitute or imply an endorsement of recommendation by Smart About Money.]