Set a Holiday Budget... And Stick to It

Do you know how much you spent on Christmas gifts last year? Chances are you don’t. Too many people shop without a budget and are shocked when the credit card bills start rolling in come January. It is important to set a budget for your Christmas spending before you even begin to shop.

How do you determine how much you should spend? There is no clear-cut answer that works for everyone. The most important thing to consider is what your own family’s pocketbook can handle, not what you think others expect of you. If your family gives extravagant gifts, that doesn’t mean you have to do the same. A good guideline is to only spend what you can pay cash for; so you don’t fall into the credit card trap. If you do get out the plastic, make sure that you will be able to pay your bill in full when it arrives.

Now that you know how much you will be spending on gifts this year, your next step is to write down everyone you plan on buying a gift for. This includes everyone -- from your friends and family to the tip for the paper boy. Now, you should allocate a part of your holiday budget to each person. This number will serve as a guideline as you begin to shop. You may be able to stay under your per-person budget on some gifts, and on some you’re bound to spend more. But the important principle is to stick to the overall budget.

Here are some tips on sticking to your budget:

• Give handmade gifts. This can also be a great way to get your kids involved. What would grandparents love more than a gift their grandchild made just for them? If you are crafty yourself, get out the sewing machine, your paint set, or that cross-stitch you never finished. Friends and family will appreciate the investment of your time.
• Use coupons.  There are more coupons for gift items than ever available online, including sites like coupons.com.  Stores like Michael's craft store frequently offer 40% off single item purchase coupons in the Sunday paper inserts.  They don't just have crafts - you can also find books (think cookbooks for gift-giving), activity sets for kids, and some even carry quality toys like Thomas the Train sets by Learning Curve.
  
  
• If you have a lot of family members to buy gifts for, suggest trading names. Chances are you’ll spend less on that one person than you would for the entire family, but they’ll get a nicer gift.
  
  
• Suggest a "creative" gift exchange. I know a family that sets a $5 limit on the gifts they give each other. Most of the gifts they find are great -- thrift store finds, garage sale bargains or items from clearance racks.
  
  
• Host a party for Pampered Chef, Discovery Toys, Creative Memories, Tupperware, Premiere Design Jewelry ... You earn FREE products with each of these. Consider doing a party by e-mail!
  
  
• Check out book, CD, and DVD clubs that offer free gifts as a sign-up bonus. They can be a great way to shop for gifts. You often get several free choices with your initial shipment, with only a few more items to fulfill your commitment over the course of a couple of years. QPBand The Good Cook are a couple examples.
  
  
• Give a magazine subscription. Best Deal Magazines offers hot titles for less than $5/year. Buy an issue off the newsstand to wrap up to give the recipient. Enter coupon code MOMMYSAV15 to save an additional 15% off your order.
  
  
• Shop throughout the year. Begin on December 26th when all the Christmas merchandise is marked down! That is an especially good time to get your gift wrapping and ribbons for next year. If you see a great sweater for your mother-in-law in February, buy it! That’s one less gift to look for when the rush is on, plus you’ll spread out your spending.
  
  
• Buy sets that can be broken apart. A set of 8 dessert plates and coffee mugs can be separated into sets of two. Fill a plate with home-made holiday goodies and each cup with a baggie of cocoa mix. Great as a hostess gift!
  
  
• Shop online. Web shopping can be a huge time saver. Not only do you avoid the crowds and waiting in line, you can also avoid sales tax. Plus, many sites are offering free shipping on orders more than $100 this season. Be sure to visit our online deals forum for valuable online coupons to help you save even more on your order.
  
  
• Shop early. The more pressure you are under to find the perfect gift, the more likely you are to spend more. So, get going now!