The 2016 holiday season in full-swing. And, it's expected to be particularly good for both brick-and-mortar stores and online merchants by jumping 3.6% in sales this holiday season over 2015 when sales reached $626.1 billion.
While that's great news for retailers, with big spending comes big debt. In fact, following the 2015 holiday season consumers added almost $1,000 to their credit card balances. At 20 - 25% interest, a few thousand dollars in holiday debt can follow you around for almost a year.
If you don't want to be in that situation, then here are 9 methods for curbing your holiday spending.
1. Create and share a budget.
When it comes to holiday budgets there are two common approaches. The first is setting a cap on how much you're going to spend, let's say $1,000. The other approach is allocating a certain amount for each recipient, such as spending $100 per person.
Even though you technically have a budget, and that's better then carelessly spending, there are a couple of problems.
For starters, you don't have much wiggle room when staying within a specific dollar amount. I personally tried this when I was younger and it was extremely frustrating. I would find the perfect gift but wouldn't buy it because it was more than I was supposed to spend. As if finding presents wasn't hard enough, right?
The other issue is that there's more to your holiday spending than just presents. There's shipping packages, mailing cards, traveling, charitable donations, and all of those holiday parties that you have to attend which requires a new wardrobe or at least an app or bottle of wine. If you don't take this into account your budget can become drained quickly.
Besides those concerns, you can create a budget however you want. I've found that basing a budget on wants and not needs is most effective. On final word on budgets. I would share it with your friends and family.
If everyone you know is aware that you're being money conscious they may work with you, instead of thinking that you're a cheapskate. For example, instead of going out to dinner maybe you and your friends prepare a homemade meal of look for cheap activities like sledding or walking around and enjoying all of the decoration in your neighborhood.
2. Make a list and check it twice.
After you've created your budget make a list of all the people that you want to buy presents for. Then go over that list and come-up with a ballpark figure on how much you're going to spend on each person. For example, if you ten people and a $800 budget then you could spend $100 on each individual.
Just remember, don't get too hung-up on the price. You may spend less on some people and a little more on others. In the end, you may stay within your budget. This list is only to guide in making sure that you don't go overboard and aren't impulsively purchasing gifts for everyone that you know.
3. Keep track of your spending.
You budget and lists can only go so far if you aren't tracking your spending. One way to track your spending is to make a spreadsheet where you record the amount of money that you want to spend on each person and the actual amount you spent. It's a simple method to keep your spending in-check.
Some people also like to have a separate bank account for the holiday so that they can view their statement either online or in their bank's so that they can check their balance and track their holiday spending whenever they like.
4. Use coupons all of-the-time.
You may be slacking on your diet this holiday season, but there's no need to stop using coupons. Thanks to sites like Livingsocial and Groupon you can receive coupons ranging from presents, travel, or dinner. Of course, don't make a purchase for non-essential items. Just remember that they're for you to use when you shop. I also suggest places like Craigslist and eBay.
I've been able to find brand new items at a fraction of what I would have to pay if I were to buy it new.
Besides coupons, don't forget to earn rewards or cashback through Ebates and Paribus.
5. Master the '10-second' rule.
"Whenever you're in a store and you pick up an item, hold it for ten seconds," writes Trent Hamm, founder of The Simple Dollar and author of "365 Ways to Live Cheap."
"During those ten seconds, ask yourself if you really need it and also if that money wouldn't be better used somewhere else. You'll almost always find yourself putting that unnecessary item back on the shelf and walking away, quite proud that you didn't waste your money on something so unnecessary."
This is especially effective for smaller items like stocking stuffers. Because they're so inexpensive it's easy to get carried away and spend more then you should.
6. Use cash.
Even after creating a budget and being more money conscience, it's still easy to overspend during the holidays. That's when you should consider using paper over ecash. Set a limit and take out that amount from your bank or credit union. When the cash is spent so is your holiday spending.
There's some other perks of using cash as well. The first is that you don't have to pay interest or worry about getting hit with iate of missed payment charges. The other is that you have more bargaining power. For certain merchants, such as a salesperson at jewelry store, cash tells them that you're ready to make a purchase and they'll gladly offer you a discount.
Bonus Tip: Open up a Christmas-club account at your credit union so that you can contribute little by little throughout the year, and then withdraw the funds at holiday time.
7. DIY or buy slightly used gifts.
If money is tight or you're on a limited budget, then consider DIY or used gifts. DIY could be something like baked goods for your friends, family, and neighbors. Plus, if you have children, it's a great activity to do with them during the holidays.
Used presents are a great option if you have people on your list who are into vintage products. For example, my nephew recently got into Transformers. I can purchase him a used figure at a better price then a new figure.
Procrastination doesn't work for everything. For instance, waiting to buy plane tickets at the last minute will typically end-up costing you more.
However, A. Noonan Moose from the personal finance blog Frugal Fringe argues that if you wait to make certain purchases, such as a book, DVD, and furniture, you can save money because you'll find a more favorable price.
In some cases Moore waited years, but with prices fluctuating daily online you can place an item that you want to purchase as a present, place it in you cart, and see if the price drops or if you receive a coupon.
9. Don't window shop.
Always have a plan when you shop. Have your list ready so that you know who you're purchasing gifts for and an estimate on how much you're going to spend. When you're done with your shopping don't visit Amazon or the mall to see what else is out there. There's no need to. You already did your holiday shopping for the year.
Here's to saving money this holiday season!