Ease Holiday Stress by Spending Wisely

Personally, I do my Christmas shopping throughout the entire year so that I can find the perfect gift at the perfect price way in advance and don’t have to do the Holiday scramble.

I bet you didn't know that the average American buys gifts for around 15 people and spends an average of $75 per person. Americans who admitted to preparing a budget for holiday shopping, half of them exceeded it by 22%. Those were the findings from a WingspanBank.com survey, which also confirms that Americans have been known to overspend by $20 billion a year. Great news for retailers, certainly, but a loud warning signal for discipline-challenged shoppers. What's more: Around 75 million people will wait until Christmas Eve to complete their shopping. Certainly not the best time to save money.

Decide this year to live your life at half the price during this Christmas season, especially when it comes to gift giving. If you normally spend $75 a person on gifts. Decide to spend $37.50 per person. It is important to spend only what you can afford, and only you know what that number is. If you aren’t sure then get a financial health checkup at: http://www.msmoney.com/mm/financial_health/finhealth_index.htm, where you can discover how financially fit you really are. From there you can put an overall budget together for Holiday spending. This doesn’t just include gift giving, it also includes travel, hotels, meals, holiday outfits, decorations, tree purchase … essentially everything you would normally spend during the Holiday season.

Once you have put together your main Holiday spending categories, you can allocate your funds. I personal use my rewards credit card so I reap the extra benefits a rewards card bring. Keep in mind, I always pay my credit card bill on time so I don't get hit with large interest charges.

If you have concerns you might not be able to pay off your Holiday shopping bills at the end of the month, then I recommend buying with cash. You can still use your credit card for ease of use, however, you need to track your spending and put cash the correct cash aside as you make your purchases. Just label envelopes for each category and put the correct amount of money inside of each. When you buy something on your credit card, just mark it on the envelope and deduct it from the total amount, so you have a running total written on the front.

When it is time to pay the bill, you just take the money out of the envelope that you safely put aside beforehand and take it to the bank. If you decide to carry envelopes of cash around and not use a credit card this is no problem, when you get home just write the amount you spent on the envelope. When your envelope runs out of money, you are finished shopping. This way you don't have to contribute to the $22 Billion dollars in overspending during the Holidays.

You can also track your purchases on a spreadsheet or in a money software program like Quicken or Microsoft money so you know exactly what you spent and don’t go over budget. It can be quite fun to see how all the budget pieces of the puzzle fit together. This is a good example for what you can do for the rest of the year. You can easily spend 50% less if you have a little time and are creative.

Here, then, are a few shopping and gift giving ideas to help you save time, money, and sanity.

* Decide how much you have to spend, and then stay within that budget. Overspending tends to set a standard for gift giving that you'll be expected to live up to year after year.

* If you overspend on one line item on your budget, under spend on others in order to make up the difference.

* For an older family member, create a calendar with special dates highlighted when you'll visit or call him or her.

* Get the whole family involved in baking breads, cookies, or candies as gifts for teachers, co-workers, and neighbors.

* Shop alone so you'll stay focused and avoid distractions.

* Buy gifts from church bazaars, craft shows, and fundraisers at your child's school.

* Spend only what you have by using either cash or a debit card.

* For the person who has everything, consider a donation to a charity (preferably one he or she would support) in his or her name.

* Avoid impulse buying--shop online and through catalogs.

* Create personal gift certificates offering your services for babysitting, pet-sitting, car washing, cooking, or giving computer lessons.

* Give flower bulbs to the green thumbs on your list; they're inexpensive and bloom year after year.

* Invite your neighbors to a potluck supper instead of exchanging gifts.

* Have your children make your holiday card this year and send out color copies to friends and family.

* Give rain checks, and then go on a family shopping spree the day after Christmas to purchase sale items.

* Shop for bulk items such as nuts and cheeses at warehouse stores like Sam's or Costco; then fill and decorate individual bags.

* Fill stockings with practical items, such as dental floss, socks, pens, or scotch tape.

* Send cyber photo cards by e-mail and save on postage.

* Have children make a piece of art and frame it as a gift for relatives.

* Make a gift certificate that offers baby-sitting, dog-sitting, or even a shoulder massage as a gift.

* Buy in advance when items are marked down 50-75%.

* Throughout the year keep your eyes open for items that are a great value. You might consider buying 10 of the same thing as gifts, if it is an amazing well priced item or on a special sale.

* Shop the week after Christmas for the following year when you can buy Christmas ornaments at 75% off – the make great stocking stuffers.

Looking Ahead

The holiday crunch is a good time to assimilate lessons you've learned in the past, so don't forget to apply what you learn to the future. For example, experts recommend you save 10% of your paycheck and squirrel it away all year to help pay for holiday expenses and the ensuing credit card debt.

Not only that, but don't forget to shop the after-Christmas sales this year for items you'll need next year, such as trimming, lights, extension cords, and wrapping paper.

Finally, track your expenses this year to help you budget for next year. Store this data with your decorations or gift list, if necessary, making it easy to find next year. Then make it your goal to decrease spending by a certain percentage or dollar amount each holiday season, and brainstorm year-round on creative gifts that will require more time and less expense.

Take a less materialistic approach to this season’s shopping and instead focus on building community and strengthening friendship and family bonds. Try to establish new family traditions--such as reading aloud a special story each year, with relatives taking individual parts or go retro with a game of Twister--to give people more to look forward to and share than opening gifts.

With all this Holiday practice, you can continue living your life at half the price by reading more tips in my free ebook titled Live Your Life at Half the Price at: www.msmoney.com

(Specifically at: http://www.msmoney.com/2004/12/live_with_flair.htm)