Gayle Whitworth, Family & Consumer Sciences Agent

As the holiday season approaches, many families look for ways to manage the associated costs on a tight budget.
While we all have a desire to give gifts and celebrate, many families find the holidays a time of great financial stress
as they struggle to come out ahead rather than being buried underneath a load of debt. Going into the holidays with
a well thought-out financial plan can help to alleviate the stress and can bring you into the New Year without
additional financial burdens.
Just as it is important to budget for monthly expenses, a good financial plan for the holidays begins with setting a
realistic budget for all expenditures, including gifts, food, travel and other non-gift related items. The first step is to
know how much you realistically have to spend. To avoid overspending, it’s best to use cash. If you have to use
credit, try not to spend more than you can pay off within 30 days. If that’s not possible, give yourself a limited time to
pay off charges, no more than 90 days. And, to make things easier, try to keep all purchases on one card.
Next, think of what you are buying, both gift and non-gift items, and who you are buying for, and set individual
amounts for each. When choosing who you are buying gifts for, think of why you are doing so. Are you doing it out of
a desire to give or because you feel you need to? Consider non-monetary gifts that come from the heart and are big
in thought. Remember too, that it’s not what your giving that matters, as much as the thought that goes into it. Gifts
that pass down traditions or family heirlooms or that give of your time are often appreciated far more than any
purchased good. When setting amounts for spending, use what you spent last year as a base, taking into account any
increases in costs for expenses as well as any increases or decreases in income.
Once you have a budget set for each person or items, decide on how you will track your spending to stay within your
budget. If you are using cash, you can use the envelope system to keep on target. Simply use one envelope for each
person or item you have budgeted. Write gift ideas on the front of each envelope, and put your budgeted amount of
money per person or item inside each envelope. Once you are out of money in the envelope, you are finished
shopping for that person or item. If using a credit card, use an index card for each person or item, and write down the
list of gift ideas. Put the amount of money budgeted on the top line and keep a running account of the amount spent.
Once the balance is $0, you are done shopping for that person or item. Remember that you don’t have to buy
everything that is on a person’s wish list. Choose the items you think would be most appreciated and seek them out.
To aid in the return of items, use one envelope to keep all receipts. If using cash and credit, keep a separate envelope
for each type of purchase. If you use more than one credit card, keep a separate envelope for each card. This
simplifies the return process and helps you to know how much money was spent on each card. It also helps in
reconciling credit card statements with receipts.

Once you have your financial plan in place, you’ll need to employ strategies to help you get the best deals and keep
within your budget. Savvy shopping skills can help stretch your dollars and often cut down on the stress of running
yourself ragged.
Savvy shopping strategies include:

• • Plan for what you are shopping for before you shop. Use the lists you made to avoid impulse purchases on
    something you like, but may not be wanted or appreciated. Sure you like that dress, but will your daughter even
    wear it?
  • Be flexible with the brands and stores you choose. While some items may be made by only one manufacturer,
    many items offer you a choice of manufacturers. Choose the brands that are within your budget. Also, use fliers
    and online stores to find the best deals.
  • Plan your purchases around store specials. Many stores reduce prices on items after a holiday, so waiting until
    after that holiday can save you money. Also, many stores have specials at different times of the year. When
    possible, plan ahead to take advantage of the specials when they are available.
  • Limit the amount of times you shop. The more times you are in a store, the more chances you have to spend
    money, even if you weren’t planning to. When possible, try to get all of your purchases at once or at scheduled
    intervals.
  • Know how to determine if a sale is a good value. Stores offer many types of sales. Knowing what stores
    normally charge for items can help you determine if their sale is a good bargain. Also, be aware of the different
    types of sales and the items that are included in the sale. Placement of sale notices are often limited to the
    items directly in front of or beside them. That pair of jeans you want to get may be on sale, or maybe the sign
    only applied to the shirts beside it. Read the sale notice clearly, and if you aren’t sure whether or not an item is
    on sale, ask a sales associate. Finally, don’t be afraid to tell the sales associate you don’t want an item if you find
    out it is not on sale once you’re at the register. Remember, it’s your money your spending, and you want to use
    it wisely.
  • Resist the urge to give into the demands of children and other family members. Remind children and family
    members that money is limited, but that you will do your best to meet both their needs and yours.
  • Stick to your list and resist impulse purchases. This can be tough, but it is essential in staying within your
    budget. Once your list is made, try not to add anything to it. Avoid thoughts such as, “I meant to put that on
    there,” which can lead to overspending.

With a little planning, holiday spending can be kept in check, and your season can be merry and bright. Putting time into
making a budget will go a long way in making good choices on how to best spend the money you have available, and
sticking to the budget will help reduce the strain on your wallet and will reduce the anxiety that often comes with
spending.

FS# 6162 FCS