Black Friday is drawing near,
which means it is time to give considerable thought to holiday shopping plans.
Creating a budget and sticking to it are the two must-do actions everyone
should take in order to keep spending in check this time of year. Yet despite
best efforts, many of us go into debt when the holiday spirit catches us. Most
people say that they will pay off holiday debt within
three months. In reality, it often takes twice that long. Save money this year,
and avoid that holiday debt hangover, by putting these five tips into practice.
Reconsider your gift-giving policy. Still getting an ugly sweater
from your sister while you give her scented bath products that she never uses?
It may be hard to bring up the subject, but changing a gift exchange tradition
can be a win-win for all. Maybe you replace tangible gifts with a day together
doing an activity you both enjoy, or doing something for a charitable
organization. If nixing gift-giving does not feel very festive, suggest that
adult family members (and even kids) draw names so each individual exchanges
gifts with only one other person instead of everyone in the family. Set a
per-gift spending limit. Have participants write down a few gift suggestions on
their name slip so purchases do not go unused or unappreciated.
Give from the heart. Instead of exchanging token presents this
year, give the gift of your time. Create a gift certificate promising to take
your nephews for a movie night or plan a fun girls' night with friends. Instead
of getting your aunt a coffee mug, offer to spend a day with her. Homemade
gifts like cookies or jars filled with made-from-scratch baking mixes tend to
be well received by teachers, newspaper carriers, hair stylists and other
Put your smartphone to use. Free smartphone applications (apps) can help ensure
you are getting the best price for an item. Snap a photo of a product and Amazon Mobile will retrieve both the new and used Amazon price. You
can even buy directly from your phone. With RedLaser, you scan a barcode or search by product image to
compare prices at thousands of stores including online retailers. If you find a
better price elsewhere, ask the store management to match it. Perhaps most
important, some apps, like Mint, can help you stay on budget by tracking your
purchases as you make them.
Manage your mailings. The postage for sending holiday greetings can quickly
add up and create a large, often unbudgeted expense. If you prefer to send
cards in the mail, try to whittle down your list. While it might not be as fun
as receiving a card in the mail, online sites including 123greetings and HallmarkeCards enable
you to create personalized e-greetings that you can email to your list of
contacts. Also, pay attention to the calendar if you are shipping presents in
the mail. The closer it gets to Christmas, the more you will pay to ensure that
an item reaches a recipient in time. Another way to save is by taking advantage
Shipping Day, offered by many
online retailers, on Dec. 18.
Say no to store credit cards. The idea of saving 10 percent on your purchases can
be enticing. But store credit cards often come with hefty interest rates that
exceed 20 percent. If you are unable to pay the balance in full when it comes
due, the high interest rate will eat up that initial
10 percent savings very quickly. Applying for any type of credit card also
triggers an inquiry on your credit report. This can lower your credit score by
as much as 30 points. These inquiries can stay on your credit profile for up to
two years even if you never activate the card.
It is possible to save money during the holidays and still spread the joy of
giving. Stick to your budget and a detailed list of those you are shopping for
and how much you can spend per person. With some planning and willpower, you
can ring in the New Year free and clear of shopper's remorse.
Andrew Housser is a co-founder and CEO of Bills.com, a free one-stop online portal where consumers can educate themselves about personal finance issues and compare financial products and services. He also is co-CEO of Freedom Financial Network, LLC providing comprehensive consumer credit advocacy and debt relief services. Housser holds a Master of Business Administration degree from Stanford University and Bachelor of Arts degree from Dartmouth College.
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