12 Tips to Control Credit Card Spending During the Holiday Season

Pressure to overspend during the holidays can break the most diligent budget plans, allowing spending to get out of control. There are holiday sales around every corner and the list of loved ones requiring gifts grows each year. Then there are the work parties, entertaining, and decorations you want in order to feel like celebrating, causing even more temptation to break the bank.

Here are 12 tips designed to help you reign in the holiday costs and eliminate the dreaded bills that must be faced when January rolls around.

1)    Set a holiday budget and stick with it. It’s one thing to put a spending plan on paper; it’s quite another to actually keep expenses within the range you have allotted. One often made mistake is to only include gifts in the budget. If you plan on entertaining or decorating these might have additional costs that also need to be considered.  

2)    Shop from a list. Retailers count on spontaneous purchases to increase profits. During the holidays a company might advertise a loss leader (items with little or no profits) to get you to visit the store in hopes you will buy additional items that have better margins. Shopping from a list allows you to take advantage of the sale item(s) without going over budget.

3)    Take a second look at layaway. Layaway plans are back in vogue and offered by many retailers. While you may think of this as the “poor man’s financing” it can really offer several benefits. First being that no interest is charged and the items are paid for in full before the holidays are over. There may be a small initial charge of a few dollars, but essentially you are guaranteed your gift. You can take advantage of sales prices, without having to charge it and pay 15% or more in interest over the next several years. If you have not set up a savings account you paid into all year, this can be a great money saving option.

4)    Keep track of non-sale prices for the items on your list. Create a list of what you want to buy and include the everyday price for the item. This can be done quickly online and is well worth the time because often items are presented as “sales” or “bargains” when they may not be that great a deal. As the items on your list go on sale, pick them up. Then just before the big day you can pick up any items that are still remaining at the regular price. It’s human nature to want to feel like you are getting a deal, even if it is really not a lower price. Marketing experts take full advantage of this when you are in a buying mood.

5)    Use cash. One of the best ways to remain on budget is to use cash. Know from the list how much you need to spend and only take enough to cover planned purchases. Then when your allotted money is spent you must stop shopping. This will help you stay disciplined because you know if you buy an unplanned item at one store you will have to eliminate something from the list at another store.

6)    Calculate total costs. With online shopping gaining momentum for your spending dollars you need to include any shipping costs or handling fees for items you want. Often you can combine purchases to meet the “free shipping” threshold. Online coupons are also offered which may include additional product discounts or free shipping. You can find additional savings, allowing your budget to stretch further if you are aware of the total costs compared to the everyday price of the items you are looking for. Finding coupon codes can be done with a simple Google search. Search for “discounts for” and then the item.

7)    Only take one credit card. Carrying multiple cards can make you feel like you have extra money. One card makes it easier to track spending on each trip and can help ensure you are staying on budget for your overall holiday budget and can curtail overspending.

8)    Use an app to track expenses. There are a number of free budget apps that will assist you in tracking holiday spending. This can be done separately or as part of the overall household budget. Not all apps require your account information that must be synched with your checking account. Apps that accept manual entries will allow you to set a specific dollar amount for holiday spending and then subtract each expense as it occurs. These apps also generally provide the ability to establish categories so you can include a food, decorating, and gift portion of the budget and manage them on the same app.

9)    Don’t apply for a new credit card just to get a discount. You are at the register and the cashier says, “You can save an additional 10% on today’s purchase if you apply….” This temptation is meant to help you spend more at that store. The last thing you need is access to another line of credit and if you apply for several cards, your credit score can take a hit.

10)    Don’t wait until the last minute to shop. The best sales are early in the season. Waiting until the last minute usually results in paying more, the lack of ability to comparison shop and the inability to take advantage of online sales that can keep costs under control.

11)    Reduce your gift list. There are likely more people in your life than you can afford to purchase gifts for. While you want to show appreciation, it is not necessary to buy everyone a gift. The gift list can balloon quickly as you try to include everyone. Instead of buying gifts for everyone, select a few people to get gifts for, and everyone else, do something simple to show your appreciation. Buy or make a card or bake some cookies. If you have a large family, consider a gift exchange or draw names to keep the costs for everyone at a level you can live with.

12)    Consider giving homemade gifts. Pinterest has reignited the craft revolution and there are tons of ideas for inexpensive gifts that can be personalized for each recipient without a lot of expense. This is a great way to keep costs down and still show your loved ones what they mean to you.

The holidays are supposed to be a time where we are grateful for the year that has passed and a time to spend with friends and family. You control whether it becomes a spending fest filled with stress and anxiety. You control if you attempt to keep up with or outdo other family members or friends you shower with gifts. In the end, you are the one responsible for the bills in January if you overspend.    Planning early and being diligent in staying on track with your holiday spending plan can reduce the stress in the new year.

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