Keep Control of Your Holiday Expenses

Posted: November 17, 2011

Now that Halloween is over, our thoughts turn toward the winter holidays. While the holiday season can be a wonderful time for families, it can also be expensive. So this year, start the holidays by planning ahead. Below are some tips for keeping your holiday finances under control.

     1. Decide how much you can afford to spend this holiday season. Experts suggest that 1.5 percent of your gross income is a reasonable figure for holiday spending. So if you make $30,000 a year, then you should plan to spend around $450 for holiday expenditures. This figure would include gifts and wrapping, cards and postage, and food for holiday meals.
     2. Plan your spending. Make a list and decide who you will buy gifts for and the amount you’ll spend for each person. Don’t forget about office and school parties, gifts for teachers, decorations, and other hidden expenses.
     3. To save money, consider trimming your greeting card list. Send cards only to out-of-town family and friends you won’t see during the holidays. Use electronic cards when appropriate. Make handmade gifts rather than buying gifts or give coupons for your time and talents.
     4. When shopping, check the sales for items on your list.  Use the Internet to compare prices before heading out to the mall. This will save you both time and gas. Make a list and plan shopping trips to include stores near each other to conserve your resources. You may want to use the Internet to make some of your purchases, but remember there may be delivery charges added on to the final cost. Be sure to place your order in advance so you do not have to pay extra for fast delivery.
     5. Use credit wisely. If you use credit for your holiday purchases, do so with caution. Charge only the amount you can easily repay quickly. Try to use only one credit card to help with bill paying. Use the card with the lowest interest rate. Whether you use plastic or cash, keep all receipts for possible exchanges as well as to track your holiday spending.
     6. Keep track of how much you spend on the holidays, including extra meals in restaurants, decorations, travel, holiday entertainment, long-distance phone calls, Christmas trees, cards and postage, neighborhood gifts, etc.  This record of expenses will help you plan for next year. To help you keep within your holiday budget next year, try to set aside some funds each month to be used toward your 2012 holiday expenses.

Karen Thomas is a family and consumer sciences educator for Penn State Cooperative Extension in Lackawanna County.