Managing Your Holiday Spending

The holiday shopping season is an exciting and potentially intimidating time. We all want to share the perfect holiday with our family and friends, and we all want our kids to be excited and proud of their gifts, goodies, trips, and more. Those desires can lead people to over-spend on things they don't need. The holidays are famously expensive, and they're especially harsh on those who are already struggling financially. For cash-strapped and low-income Americans who have to struggle to meet regular burdens of bills and household expenses, the money for gifts and extra food can be a back-breaker. There's always the temptation to slap it on a credit card and sort it out later, but we all know how fast that can lead to trouble.

Here are some user-friendly tips, advice, and resources for a festive season that won't leave you with financial regrets in the New Year.

Create A Budget
The best tool for money management is a budget. Once you've created your seasonal budget, you can determine which expenses to reduce and repurpose towards holiday costs. For example, you might be surprised to learn how much six weeks' worth of fast food purchases and store-bought coffee can add up. Choosing cost-effective alternatives like making more home cooked meals and brewing your coffee yourself will save you a fund of money that you can then put towards gifts and other seasonal costs.

Start your budget by making a list of your monthly income and expenses. Gather one month of pay stubs, bills, and receipts and separate these into categories like housing, food, debt payments and so on. Adding percentages (expense/income = %) helps you visualize where that hard-earned cash goes. Your list might look something like this:

35% Housing: rent, mortgage, insurance, taxes

15% Food: grocery, take-out, meals out

10% Personal/Entertainment/Recreation: internet, cable, phones, child care, child support, clothing, shoes, movies, amusement parks

10% Transportation: gas, parking, tolls, maintenance, loans, insurance, plates, license, registration

10% Utilities: electricity, gas, water, waste

5% Debt Payments: student loans, credit cards, other loans

5% Healthcare: medicine, insurance, co-pays, glasses, dental

5% Household Supplies/Maintenance: repairs, laundry, cosmetics, cleaning products, toiletries

5% Savings

Once you have an honest budget drawn up, you will see that some expenses, like housing and utilities, are fixed and inflexible. Other sources of spending, however, like recreation and entertainment, can temporarily be reduced to help with holiday costs.

Create your budget as far in advance as possible. Six to eight weeks of preparation can make a big difference, but the sooner you get started, the better.

Use What You Own
We spend a lot of money on holidays. In 2016, Americans spent over 655 billion dollars on Holiday retail![1] Some of that money went towards decorations that people already had in a basement or attic somewhere. What can you learn from that huge figure? You can save money by avoiding "must have" decorating trends and using what you already have instead.

Consider creating a small collection of reusable decorations, if you don't already have one. Grab some stackable plastic boxes and label them. You can safely organize and store all the trimmings that you can use again next year in this new container system. Carefully pack up ceramic pumpkins, turkey decorations, fairy lights, ornaments, and leftover gift wrapping material. This collection will save you time and money that you might otherwise spend shopping for new decorations, while at the same time creating a set of treasured keepsakes for your family.

As an alternative to buying traditional wrapping paper, save any pretty pictures from newspapers and magazines. They will make unique wrapping paper for small gifts. You could also use reusable gifting bags. Pack them away with everything else and use them again next year.

Save Money Shopping Online
Online retail is another example of why you don't want to do your shopping at the last minute. You can find great deals on items and have them shipped right to your home. Sometimes even the shipping is free! If you wait too long, you will need to use express shipping, which will bump up your price tag significantly. Check out places like Amazon, eBay, and Wal-Mart to shop without ever having to wait in line. You'll also save on transportation costs and meals, drinks, and other little extras that often sneak into a shopping trip.

It's easy to get caught up in the music and displays of a physical store and get sucked into buying inappropriate or unsuitable items. Doing your shopping online can also help keep you focused on the people for whom you are buying gifts. If you enjoy the physical activity of shopping, you can still do it, but just go to the shops to get gift ideas. Once you've written down a list of interesting items along with their prices, search for the item online to see what kind of deals you can get. Don't forget to use discount codes when buying online.

Retail layaway policies allow you to buy an item or items and pay for them over the course of a longer period (typically 8-12 weeks) rather than making one big investment all at once. You pay only a percentage of the total price as a down payment, then place the order on hold while you make payments in fixed monthly installments. A solid budget can be helpful in determining if a layaway option would be right for you. Be sure to check for interest rates, late fees, or other potential hidden costs.

Many major retailers offer layaway including Toys R Us, Babies R Us, GameStop, Kmart, Sears, Wal-Mart, Marshall's, Baby Depot, Burlington Coat Factory, H-E-B Plus!, and T.J. Maxx.

1. "Holiday 2017" .