Holiday budget

Kids get older and families get bigger, but your holiday budget can’t keep up with the growing demands. According to the American Research Group, Americans plan to spend an average of $983 on gifts alone during the 2017 holiday season. That’s up 6% from 2016 and an increase of nearly $400 from 20 years ago.

Of course, some will spend much less than $1,000, finding ways to squeeze every penny. Eager shoppers often find good deals during the post-Thanksgiving Day weekend. In fact, Cyber Monday online sales hit an all-time high in 2017 at $6.59 billion. Savings for the consumer can reach 50% off the retail price.

Despite the deep discounts, it doesn’t take long to blow your holiday budget. While spreading joy is the reason for the season, it shouldn’t come with a sleigh full of stress.

Here are five tips for creating a holiday budget that keeps you out of debt:

1. Start your savings early

January is an ideal starting point when you’re saving for end-of-year spending. “The more time you have to save, the less you have to put away each month or week,” says Andrea Woroch, money-saving expert who has appeared on Today, MSNBC, CBS and more.

If you can, set up automatic transfers from your paycheck to a dedicated savings account. The money will get stowed away before you have a chance to miss it. Little by little, you’ll build a reasonable holiday budget that didn’t leave you feeling overstretched at any point throughout the year. Plus, if you only spend what’s in that dedicated savings account, you prevent any chance of overspending.

2. Set a limit for gifts

You make a list every time you go grocery shopping, right? Do the same for your holiday shopping, but make this one much more detailed. You can set a maximum price for individual gifts, or you can break it down by person.

For instance, set a spending limit for each person, and then write down a few gift ideas that are priced within that limit. Make sure when you total the individualized limits, the sum doesn’t exceed your holiday budget.

Having such a detailed shopping list will also keep you focused when it’s time to hit the stores. You’ll have specific gifts to buy and won’t waste time aimlessly wandering around a crowded mall. Bonus: When you know what you want, you have a better chance of finding the best deal.

3. Budget for non-gift expenses

Are you traveling to visit family this holiday? In the whirlwind of shopping and gift wrapping, it’s easy to forget there are other expenses that pop up this time of year. Gas can guzzle your budget if you’re headed out on a family road trip. Likewise, airfare and baggage fees add up quickly. And these are only the major expenses you may incur during the holidays.

Consider the fact you may need extra babysitting services, so you can shop more efficiently or attend your company’s festive get-together. Woroch adds a reminder to factor in postage for greeting cards, groceries for guests, festive attire for holiday parties, hostess or white elephant gifts as well as shipping fees. These are all expenses that are often overlooked in planning a holiday budget.

Don’t underestimate the small stuff. Any spending outside your everyday routine can put a dent in your bank account. Plan for the worst, so you can hope for the best.

4. Pay with cash or a rewards credit card

“The best strategy is to use cash,” Woroch advises. “This way you can’t spend more than you have!”

Unfortunately, the TSYS 2016 U.S. Consumer Payment Study revealed that only 11% of the more than 1,000 consumers polled chose cash when asked, “When given a choice, what payment form do you prefer?” On the other hand, 40% said they prefer credit cards.

For those most comfortable using credit cards for their holiday spending, choose a rewards credit card. Earning cash back on your purchases is a smart savings tactic. And if you can apply the rewards to the statement balance, even better.

5. Check your account daily

As maniacal as it may seem, daily check-ins are eye opening. After an hour or two of shopping online or marching through the mall, you can easily rack up hundreds of dollars in gift receipts. Watching those charges draft from your account will let you see exactly where the money is going and how quickly it’s going. This will help keep you accountable for all that spending.

Remember: Treat your holiday budget like cash in your pocket, because when it’s gone, you’re done.

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