10/29/2010

Creating Your Holiday Savings Plan

Sale doesn't always mean savings. That's why it is important to create your savings plan for the holiday season. Holidays -- once a time for family, food and gifts -- are now prime seasons of financial peril. When using credit cards to purchase items, it's easy to forget how much has been actually spent. Here we've written some guidelines to help make the holidays manageable.

It’s easy to overspend during the holidays. An American Express survey found its customers plan to spend approximately $1,500 this year on gifts alone. If you are concerned about staying within your limits, create a plan:


• Decide on how much you can afford to spend
• Budget in hand, write down your shopping lists for the year
• Look at the list and see where you can cut back
• Don’t forget to include the extras when you create your budget
• Plan your gift buying shopping trips
• Use store’s convenient lay-a-way plan, if unable to pay for full item
• Make gifts at home: baked goods, picture collages, or arts and crafts

1. Tally up your day-to-day expenses. List your monthly living costs, including essentials like house or rent payments, food, transportation to work and utilities. Once you know how much you are spending on the “need-to-have” items for your family, the easier it is to create a budget.
2. Prioritize what needs need to be attended to first. Once you know your priorities, create a gift list of who you want to give gifts and what you plan to purchase. Cut back on gifts for "social" friends; give a card or better yet, be creative – buy supplies in bulk and make homemade individualized gifts.

3. Create a Chart: Using the worksheet at the end of the post create a chart of who you are going to be buying items for, how much you estimate to spend on the items, and how much they actually cost. The chart provides an easy way to see where your money is going. Does your money go towards the little extras like gift wrapping, does it go towards traveling, or does it go towards family phone calls? By figuring out how much you estimate on spending, you can “cut the fat” from other areas.

4. Focus on alternative gifts to your family and friends without spending a fortune. Reduce holiday expenses and make gifts that will be treasured by your family and friends for years to come.

5. Use a planner: Use a planner to help organize when you are going to buy gifts. Some stores offer huge sales in accordance with the holiday, or during certain times of the day for a few hours. Go there early in order to bag the best deals on items. Combine money saving coupons with sales for extra savings. A lot of stores now offer their coupons online for extra convenience.

6. Remember How Much is Spent on Little Extras: Little items that are nice to have, like stocking stuffers, can really add up over time. They are small items. It's easy to forget how much they cost over time. between the candy, Dollar Tree items, and little gifts. Record those stocking stuffers! Click here for an easy to use chart.

Shopping tips:
• Don’t wait until the day before the big event to shop
• Leave the credit cards at home
• Charge carefully
• Get organized
•Remember that online items will cost more due to shipping charges

Also spend time not money. Going out and doing things together can mean a lot more to family members than expensive gifts. Don’t be afraid to be creative. Consider a secret Santa gift giving event where each person pulls out a name out of a hat, and buys only for that person. Each person only gets one gift, but each person spends less.


Worksheets:

Savings Plan Worksheet

Savings Planner

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