Tips on holiday spending

With the holidays approaching and the economy struggling it's important to be watchful of spending. Families can budget their money, monitor spending and avoid getting in too deep with credit card debt, and still have a happy and memorable holiday season.

November and December are months of special dinners with family and friends, parties, and exchanging of gifts. These good times lead to higher-than-usual family expenses. Over-enthusiastic holiday spending can create financial troubles, especially in January when the bills arrive.

Elizabeth Kiss, Purdue University Extension family resource management specialist says it is important to start by making a list of all the things you are likely to spend money on. These can include things like gifts, decorations, cards, postage, travel, food and clothing. It's important to then evaluate how much money you have to spend and the likely cost of the items on the list. Then create a budget and stick to it.

To help in controlling spending consider the following:

Consider having the family draw names for gifts instead of buying a gift for every family member. If money is really tight, discuss a "gift hiatus" with your family. Instead, of purchasing gifts, consider time spent together as a "gift." Or give coupons for services you can provide, such as washing the family car or cooking a special meal.

Budget how much you can afford to spend from current income and savings and how much you can afford to put on credit cards and still pay it off quickly.

Set realistic limits. Remember, it is the thought that counts, not the price tag.

Shop early, take advantage of sales, and avoid impulse buys.

If you decide to use cash only, leave credit cards at home when you go shopping. Have a specific amount of cash in hand and don't withdraw more when it's gone. If you decide to use checks, be sure to record each check after it is written and figure the balance before writing another check. If you decide to use credit, choose one credit card for all your holiday spending. Using one card will help you keep track of your spending more easily and help you control spending. An easy way to stay within your spending limit is to write down your spending limit on a piece of paper. Each time you spend money, write the amount on the paper and subtract it from your spending limit. Keeping a running total will help you think before spending more than your limit. And, keep all receipts in one place. Have a plan and stick to it. Think about the long run and what this amount of spending is going to do to you and your family.

With finances tight, it may be tempting to rely more on the use of credit cards for holiday purchases. It's easy to get caught up in the moment and make too many charges, which are hard to pay off. People may have good intentions of paying credit cards off at the end of each month, but due to a variety of circumstances, most don't. To help avoid excessive credit card debt remember not to charge anything that will be gone before it's paid off, such as fast food or gas.

Setting a holiday budget that includes all types of holiday spending and that fits within your personal financial situation can help prevent facing a pile of bills in January without the ability to pay them.

Finally, try focusing on non-material ways to celebrate the holidays. Think about the more meaningful ways to spend the holidays. There are other ways to celebrate beyond the spending.

Editor's Note: Ann Ludlum is a K-State Research and Extension family and consumer sciences and 4-H extension agent assigned to Bourbon County. She may be reached at (620) 223-3720 or aludlum@ksu.edu.