Party invites are arriving, people are sipping from their red Starbucks cups, and the department stores have unveiled their holiday display windows. The holiday season is here. To avoid being stressed-out in December and maxed-out in January, do yourself a favour this month: grab a gingerbread latte, set your intentions for the season, and create your financial plan for the next two months. Here's how to get started.
Create a holiday spending plan
Create a plan that includes everything and anything related to holiday expenditures. Think beyond the gifts to the postage, gift wrap, holiday dinners, hostess gifts, and of course travel. Examine and re-examine your spending plan. Then, cut your list in half with some of the suggestions below. For free online budgeting tools to help you stick to your plan, check out a site like moneystrands.com. Here you can plug in your spending plan and receive updates on your spending categories automatically as you shop.
Give the gift of experience
As we head into holiday season, give some thought to the benefits of experiential spending. According to a recent study, positive emotions associated with an experiential purchase stay with us far longer than those associated with a material buy. Go over your spending plan and your gift list, and see if there are less expensive experiences to give in place of material items you planned to buy. Treating a friend to lunch instead of a new sweater, or taking your dad skating and for beer instead of another tie or gadget is a smart investment of your time and your money. Also, think about ways to make new traditions this year without spending a fortune, like making your own advent calendar. Grab a corkboard, cut out small squares of paper with the date on one side, and a fun and free activity on the other. You can do this with your kids - "make snow angels," "read a holiday book and have hot chocolate," "go tobogganing" or with your partner - "cuddle by the fire," "watch Elf," "soak in the tub listening to holiday songs." If you are making the calendar with someone else, split up the squares so you both get a little surprise every other day.
Get creative with wrapping
For the fashionista or globetrotter in your life, reuse last month's fashion magazine or an old map to wrap smaller items. It's free and adds a personalized touch. For larger items, use packing paper instead of expensive wrap. Large rolls can be purchased for as little as $2 and used throughout the year. The earth-toned paper can be dressed up with colourful ribbons or twine. For more ideas on creative and inexpensive wrap, click here.
Know the smartest way to pay
There are perks to using a credit card or charge card for your buys this season. If you've set aside money, and can pay your bill in full when it arrives, then paying with plastic will add added protection. You'll receive extended warranties on electronics purchases, so you won't need to opt in to any additional warranties. You'll have proof of purchase, something you'd lose if you misplaced a receipt, in case there are any problems with your buy. Plus, if you collect them, you'll be earning points for your purchases.
Take advantage of holiday deals
Consider signing up for the mailing lists of the stores you'll be shopping at this season. You'll receive e-mail alerts with valuable offer codes and upcoming sales you can take advantage of. Also, to avoid costly shipping costs, take advantage of a site like Freeshippingday.com. On Dec. 17, any item you order will ship for free, with a guarantee of arriving by Christmas Eve.
Regardless of what holiday you celebrate, you'll likely decorate your home, purchase gifts and go to or throw parties. All of these things add up. To avoid a post-holiday financial hangover, get clear on what the holidays mean to you and to your family, get creative with giving for less, and create a spending plan that you can stick to and feel good about.