In addition to buying gifts and taking trips, the end of the year brings other, sometimes unforeseen, expenditures that can catch the unprepared off-guard. Suzanne Applegate, coordinator for the Student Money Management Center at the University of North Georgia, talks about these seasonal expenditures and strategies to keep financial stress out of the holidays.
What are some strategies for general holiday spending?
You must have a plan. Before you make out your gift list, set a firm budget. Make a deal with yourself that you won't go over that budget, no matter how enticing the holiday glitter is in the stores. Remember there are marketing geniuses preying on your emotions at this time of year.
Next, make a gift list. Write down each person you are buying for and stick to your list. If possible, use cash instead of credit cards. Studies show that most people spend 12-18 percent more with cards. Think about how stressful it can be to have a large balance hanging over your head through the holidays. You can also challenge yourself to not carry a debit or credit card for a week; you may be amazed at how much money you save.
If you haven't started shopping yet, do it now. Waiting until the last minute causes more stress, and this can cause you to spend more. It also helps to comparison shop before you go out to buy. Know what things cost and try to find coupons online to use in the stores.
Lastly, listen to the hints that your loved ones drop about what they really need. A thoughtful gift will mean more than an expensive one, and this can include the gift of your time.
What are some end-of-year expenditures that some may be unprepared for, and how should they deal with them?
Unexpected expenditures at this time of year can include property taxes, last-minute travel and impulse gifts. Try to plan ahead whenever possible. For example, it's very helpful to try and save a portion of your property tax bill each month so you are prepared at the end of the year.
If last-minute travel pops up, there are websites that specialize in that area. It's also a good idea to carpool for travel as much as possible, especially for long distances.
Try not to give in to last-minute and impulse gifting. Give a card instead, and do not feel obligated to buy for everyone. People are giving you a gift because they can afford it and it is something they want to do. It is not because they expect a gift from you in return.
What are some methods for being better prepared in the future?
Planning ahead for next year can begin now. Throughout the next year, be on the lookout for great sales on things your loved ones will need. Remember to have a list and budget for this also. Other things you can do throughout the year to ensure you are prepared for the next holiday season include:
- Send e-cards instead of buying cards.
- Skip the daily gourmet coffee.
- Bring your lunch to work and limit eating out.
- Track your spending. Try writing down every penny spent for the next six weeks.
- Make your gifts.
- Plan for related holiday expenses such as decorations, wrapping paper, party outfits, etc. Look for these on deep discounts after the holidays and throughout the year.