Smart Spending for a Happy Holiday

Some people may feel guilty about not spending as much time with their loved ones or friends, and will compensate with a special gift.  Others may feel they need to ‘keep up with the Joneses' to match what friends, families, neighbors, and even co-workers are doing.  And some simply get swept away in the glitter of the season -- overspending before they realize what they're doing. 

For all of these reasons, setting a budget and making a list -- and matching the two -- can be really effective at reining in the ‘over' part of holiday overspending.

Smart Spending

* Crunch the numbers.  Create a holiday budget listing all expenses, including small gifts and "extras," such as cards, wrapping paper, decorations, and holiday clothing purchases.

* Avoid money matching.  Most people feel the stress of the dollar-for-dollar matching competition, so talk with the people on your shopping list about setting limits.  Fill in gaps with homemade presents or offer help to the recipient with chores or services.

* Start early.  Avoid the last-minute rush so that you'll have more time to comparison shop.  If you're in a rush to get out of a crowded mall or store, you're more likely to spend impulsively as a way of escape.

* Get creative.  Set up a gift exchange among friends and family.  For children with big-ticket items, consider pooling resources with other family members rather than splurging yourself into debt.

* Be a quitter.  When you hit your budget limit, stop!  Leave credit cards at home and put each person's budget in an envelope, in cash.  When it's gone, it's gone -- and you're done.

* Spend within your means.  If you run up a big bill to celebrate the holidays and then pay it off at a leisurely pace, next year you may experience financial heartburn -- the sour sensation that your holiday overindulgence is taking way too long to leave your budgetary system.

There are plenty of ways to have fun, create lasting memories, and avoid the "Bah, humbug!" approach to the coming holiday season, despite the economic downturn and strain on family budgets.