Create a Holiday Spending Plan

For most shoppers, it’s hard to get through the holiday season without using a credit card. If you can swing it, curtail the urge to put it on plastic this year. Research shows that consumers are willing to spend more, sometimes up to twice as much, when using credit cards. Following an all-cash strategy can help you spend less overall as well as avoid that sticker shock when you open your credit card statement in January.

Consider making this an all-cash Christmas. That may mean allocating a certain amount of each paycheck to holiday expenses between now and December 25th.  Determine how much cash you can reasonably spend each week, and try to stay on track.  That may mean concentrating on certain things now, and waiting to buy other things until you can afford them. Your spending plan should take into account that certain things need to be purchased ahead of time: gifts for out-of-town relatives that need to be mailed, supplies for making homemade gifts, and so forth.

If you’ve gone over your household budget and discovered that you can’t swing an all-cash Christmas, you may want to consider cutting back on holiday expenses. Here’s an excellent discussion for those who feel like they can’t afford Christmas: What if you can’t afford Christmas?

Money Saving Assignment: Create a holiday spending plan. How much cash can you allocate to holiday spending each week? Try to space out your purchases, if necessary, to avoid using credit if you carry a balance on your cards. Go back over your holiday budget spreadsheet and determine which things you should be buying first, and which can wait.