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Holiday Spending Survival Guide

| November 23, 2016
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With Black Friday around the corner, for many the stress and pressure of holiday shopping can start to creep up. Between buying gifts, traveling to visit family and decking the halls, spending during the holidays can get out of control. But going into the season with a plan can help you keep spending within your budget and limit financial stress.

Here are four fiscally smart ways to navigate through the holidays while still enjoying the wonder of the season.

  • Decide how much to spend – Don’t head out the door until you have a holiday budget in mind and have identified what your spending limit will be. First, review your spending history from the previous holiday season and identify where you spent more than you planned. Then, review all of your major spending categories this year—like presents, meals, travel and entertainment. One rule of thumb is to not spend more than 1.5 percent of your income on holiday expenses.Consider going even deeper to set a budget for each person on your list. Knowing your spending limits beforehand will help keep you on track.
  • Write it down – Whether you are a list maker or prefer a spreadsheet put your plan down on paper. Studies show if you write a plan down you are more likely to stick to it. Include in your list who you intend to spend money on and how much you plan to spend on them. And keep your plan with you at all times, whether it is on paper or your phone for easy reference while shopping. While you’re at it, take a hard look at your list and trim it down where you can. Consider forgoing store-bought gifts for something homemade—and affordable—that has a more personal touch.
  • Consult your significant other – It is important to talk with your significant other and close family about your holiday spending plans. For example, if you and your spouse are on the same page when it comes to your holiday budget, the more likely you are to comply with it. Also, make sure that your spending plans are in line with your other financial goals for the year. You don't want to overspend on gifts and then have to forgo a family vacation. And when it comes to gift giving with each other, you might consider something outside of the usual gift like an experience you would both enjoy, or a joint gift versus individual gifts.
  • Consider your options: credit, debit or cash – To hold yourself more accountable to your holiday budget, decide beforehand if you are going to use credit, debit or cash to pay for your purchases. If you decide to use credit, make sure you look at which card will provide you the lowest interest rates and/or spending perks and make a plan to pay the card off in a timely manner. And be sure to avoid costly store credit cards that often have hidden fees and higher interest rates. If you decide to use debit, you might want to open a new checking account for the sole use of holiday spending to track purchases more closely. Another way to monitor spending is to pull out a specific amount of cash for shopping and once it’s gone, your shopping is done.

These are a few ways to enjoy the holiday season without breaking the bank. After all, love, laughter and caring are what people remember most about the holidays, and none of that takes money.

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