Get more bang for your holiday bucks
A recent Gallup Poll says American consumers plan to spend an average of $715 on holiday gifts this year. Whether that amount accurately reflects your budget or not, you can still make the most of what you spend.
“Start early, plan, do research upfront and consistently set aside money for this purpose,” says Mechel Glass, director of education for CredAbility in Atlanta. “Then when you do see a deal, you can take advantage of it. But if you wait until the last minute, you risk paying much higher prices.”
Several experts, including Glass, chime in on how to save money and avoid going into debt for the holidays.
Organize your home to save money
Entertaining during the holidays gives you an excuse to restore order to your house, which may help your budget in surprising ways. While cleaning, you may find items to re-gift, wrapping paper, ribbons and decorations you bought but didn’t use — or even gifts you stashed away and forgot to retrieve.
Search for that wrapping paper and ribbon you bought on sale last year after the holidays so you don’t make duplicate purchases this year. Look for holiday greeting cards left over from years past. Then create a designated space for holiday items so you don’t lose track of them again.
Finding money you didn’t know you had can also be a benefit, says Monica Friel, founder of Chaos to Order, a professional organizing company based in Chicago.
“We recently found $1,200 in bonds at a lady’s house we were working on,” Friel says.
While purging closets and drawers of unnecessary items, you may also discover items to sell. List them for free on eBay Classifieds or Craigslist, or have a yard sale.
Prepare a budget and know your limits
Write down how much money you can afford to spend for each person on your gift list, including teachers, co-workers, friends and family. Factor in the cost of decorating, greeting cards and entertaining into your budget. Also add in the cost of travel and shipping of gifts, says Glass.
“If you’re traveling by air, don’t forget to add baggage fees into your plan,” Glass says. “All those expenses, in addition to gifts, can add up.”
One of the best ways to stick to your spending plan and save money is to put the cash you have allotted for the holidays into a separate account — and don’t touch it until you’re ready to buy something on your list.
Be an educated consumer
“A good deal is something on your list and within your budget,” says Ellie Kay, author of “The Little Book of Big Savings.”
To save money, comparison shop on your computer before setting foot in a store, says Kay. Use search engines like mySimon.com or Bing.com. These are popular, reputable and safe sites that categorize items by type (electronics, books, clothing, etc.) and price. Consumers find them easy to use and thorough because they search the entire Web.
To find the best price for an item, look for coupons from the manufacturer’s website or on sites devoted specifically to coupons such as CouponCabin.com, RetailMeNot.com and DealHunting.com. If you plan to order online, search for free shipping offers.
Use this same strategy with your holiday food shopping. If you’re baking or cooking for a family gathering, check with CouponMom.com for what’s on sale at grocery stores and drug stores near you. Get coupons from the site to use at those stores.
Shop with a list
To save money, create a detailed list of your anticipated holiday expenditures, says Glass. Divide one sheet of paper into four or five columns. In one column, put the gift recipient’s name; in the second column, at least two gift suggestions for that person; in the third, write how much you can spend; and in the last column, indicate how much you actually spent. You can add a fifth column if you know where you can find the gift.
Below the gifts list wrap, bows, cards, decorations, trinkets, entertainment and travel costs. Add up all of your estimated costs, making sure the amount is the same or less than your budget for the holidays.
With list in hand, shop early to get the best prices.
Track your expenditures
“You can go high-tech or low-tech with tracking,” says Kay.
People who understand programs like Microsoft Excel can keep a running total of what they’ve spent on their smart phones to stay within their budget. A small notebook works just as well.
“Just make sure that whatever you use is accessible to your entire family, in case someone else makes a purchase that needs to be logged,” says Kay.
If you’ve allotted $50 for Aunt Harriet’s gift because that’s the best price you found in your research and you find a sale where it’s $15, you can shift the balance of your aunt’s limit to someone else. But, if you expect to save money and stay out of debt, don’t go over the $50 cap.
Pay with cash
Joseph Montanaro, a certified financial planner, urges you to use cash for all your expenditures.
“Cash makes it easier to stick to your budget,” says Montanaro, who works for USAA, a company based in San Antonio that provides financial services to active and retired military families.
One relatively painless way to collect some extra cash and save money is to capture every family member’s pocket change in a jar. It’s old fashioned, but effective.
“Our family does this all year and we average $800 to spend on the holidays,” says Montanaro.
When you’re ready to shop, label envelopes with the name of the gift recipients and your other spending categories and put the appropriate cash in each envelope, matching the amount with your planned budget.
If you feel insecure about carrying cash, using a debit card makes even more sense. But keep close track of what you’re spending or it could get out of hand, just like credit card use can.
Exercise care with credit cards
If you’re coming up short, it’s OK to pull out a credit card as long as you pay off the balance at the end of the month, says Kristen Hagopian, author of “Brilliant Frugal Living.”
By paying off the bill at the end of the month, you save yourself fees and credit card interest.
“I like to use credit cards that reward me with gift cards and then turn around and use those for necessities like groceries,” Hagopian says.
When using a credit card, make sure you read the fine print and know the bank’s terms. Don’t use a card that’s going to rise to a higher interest rate later. Know what will happen if you’re a day late paying the bill. Whatever the terms are, make sure you can abide by them or pass on using that credit card.
If you fell back on using credit last year, think back to those purchases. How long did it take you to pay off your credit cards? Are they paid off now?
“Now is the time to cut back, ramp back and bite the bullet,” says Hagopian. “You’ll thank yourself in January.”