As the giving season approaches, there is one important item to add to your to do list: Create a holiday budget. Before the gift shopping and wrapping begins, take control of your wallet through financial preparation. Remember, you can avoid the credit card crunch and the dangerous pitfall of borrowing against your company's retirement savings plan or IRAs.
Here are some helpful tips to establish a holiday wish list and spending budget:
- Start by determining the total amount of money that you want to budget for gifts. Carefully evaluate how much money your budget will allow for holiday spending. Be honest and be realistic. The idea is not to spend more than you plan for during the holiday season.
- Next, make a list of people that you will be buying gifts for this year. Make sure to include any events you are hosting or attending and the expenses that come along with those.
- Write down gift ideas for each person on the list. Set a max amount that you will spend for each person, then estimate the cost of each gift idea. Create an alternative gift idea in case your first idea is too expensive.
- After making the purchase, write down the exact cost of the gift, totaling your expenditures. Be sure to include the price of gift wrap and cards, as buying smaller items can add up fast.
- Prioritize your holiday wish list and consider your plans in light of your budget. You may have to sacrifice part of your budget between gift-giving, entertaining, or travel. Families can decide together how much to spend for the holidays, including gifts, decorations, and food.
- Don't forget inexpensive gifts, such as themed baskets or stocking stuffers. Smaller gifts can add up quickly.
Whether you celebrate Christmas, Chanukah, Kwanzaa, or even the Winter Solstice, you can make a commitment to sharing holiday presents with family and friends, attending your place of worship, and giving to your favorite charity, without worrying about credit card bills or repayment of bank or 401(k) loans. Happy Shopping!