Gail's Guide to Holiday Shopping

Getting to January without a financial hangover your money

The holidays are just around the corner and only the most savvy of us have everything under control. That's one of the problems with our very busy lives… there's just no time.

But if you want to have a happy holiday that doesn't leave you holding your aching head when the bills roll in come January, you have to start planning early. The longer you wait, the more you're prone to give in to stress, make impulse purchases, blow your budget or even buy a lame gift.

Look at your holiday spending as you would any other big-ticket item. While you're splitting the cost among a variety of expenses, the bottom line is still the same -- you're spending a lot of money in a short period of time.

In the best of all worlds, you would have started saving for your holiday spending in January. Yup, you would have made it a budget item and set aside $10, $50, $150 a month so when the season rolled 'round, you'd be ready. After all, it's way easier to set aside $100 a month than to come up with $1200 all at once. This is how I do it, and come August I start keeping my eyes open for "deals" on things I know my friends and fam will love.

Failing that, start here, with Gail's Holiday Spending Plan:

  1. Write down the amount you want to spend in each category of holiday expenses. Gifts are only the beginning -- don't forget to account for travel costs, postage and shipping, decorating, greeting cards, entertainment and photos.

  2. List the people you plan to shop for under the gift category, then divide up your budget accordingly. Limit your budget to what you can afford right now and avoid a financial hangover in the New Year.
    If you spend $500 on a credit card at 18% interest, and pay the minimum each month, it'll take you seven years -- and cost $365 in interest -- to pay it off.
    Consider setting a dollar limit on gifts or drawing names among extended family, roommates or co-workers.

  3. Jot down any gift ideas that you might have for the people on your list. Comparison-shop online before heading to the store. (Don't forget to include shipping costs in your calculations if you decide to buy online.)

A dash of planning and dab of creativity can also help you keep your entertainment costs under control:

  • Invite guests to bring something to share at a potluck dinner.
  • Serve brunch, throw a finger-food party or host a wine and cheese tasting instead of a full-blown turkey dinner.
  • Co-host a party with a pal or sibling, and share the cost.

Make sure you set a dollar limit for your soirée. And list the items, ingredients and décor you'll need and how much each will cost.

Remember, that the best gifts don't have to cost money. If you're financially challenged this year, offer up your time babysitting, cooking meals, house cleaning, massaging, sewing, knitting, transporting, or whatever else you're good at. Clip a picture of the service you'll provide and be clear on how often, as in "I'll babysit one weekend a month from February to June." Or better yet, make your own coupon book.

There now, you don't have to worry about starting the New Year with a financial hangover. Happy Ho Ho Ho!

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