How to Budget During The Holidays

Save money during the season of giving with these thrifty tips.

Americans part ways with an obscene amount of cash during the holidays. In recent years Americans have spent an average of about $700 during the season of giving. But there’s no reason to break the bank each winter. The cost-saving tips below will help you avoid starting the New Year in debt.

Know What’s in Your Bank Account: The surest way to avoid overspending during the holidays is to know how much money you have available for gift-giving, festivities and decorations. Once you’ve budgeted money to cover your regular monthly bills, determine how much money is left over for presents and set it aside. You may be disappointed if you don’t have as much money for presents as you would’ve liked, but it’s better than overspending on gifts and not having money to cover your bills.

Shop With Cash Only: Studies have shown that consumers overspend when they shop with credit or debit cards instead of cash. Paying with plastic makes it more likely that shoppers will purchase items out of their price range or that they hadn’t planned to buy. Given this, only take the amount of cash budgeted for gifts with you when you go holiday shopping and leave the plastic at home.

Shop Online: Shopping online is the easiest way to find gifts at the lowest price possible. Rather than travel from store to store, you can search the Internet for a particular gift and see which online retailer is selling it for a bargain. You’ll not only save money but time.

Set a Cash Limit: It’s no secret that times are tough as the economy rebounds from the recession. Do yourself and your relatives a favor by setting cash limits on the gifts you’ll give another. Take the pressure off everyone by agreeing to spend no more than, say, $25 per gift or whatever your relatives can afford.

Gift Exchange: Cut back on gift giving by having the adults in your family buy just one present for another adult relative. You can do this by having your relatives draw names. You might draw your cousin’s name; your mother might draw your brother’s name. The great thing is that the person’s name drawn is the only adult for whom you’re responsible for buying a gift. There’s no need to buy gifts for all of your siblings, in-laws, aunts, uncles and cousins in this scenario.

[ALSO READ: Holiday Desserts]

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