Holiday Savings... Already?
But it’s only October! There are still Halloween costumes – let alone candy – to buy!
It’s true the holidays are still a few months off, but before disregarding this advice, look at your calendar and count how many paychecks you expect to get between now and December. You might be unpleasantly surprised.
If you start your holiday shopping now, you can spread out your purchases among many paychecks, instead of sacrificing an entire paycheck (or worse, credit card bill) on all of your holiday purchases. Think about it: This year you could be one of those people finished with their holiday shopping before December!
Last year, the average American spent between $800 and $900 on holiday purchases. That’s a monthly expense of at least $67 spread out over the year, which is probably comparable to some of your other monthly expenses. Plan now and you’ll thank yourself (profusely) later. Here are some tips.
Get Organized
If you kept an envelope of receipts from last year’s gifts, you’re already ahead of the game. By knowing how much you spent last year, you’ll have a good idea how much to budget for this year. You’ll also know what presents you bought so you’ll never make the mistake of giving someone the same gift twice (or “re-gifting” to the wrong person). If you did not keep old receipts, consider doing so this year. Grab an envelope, write "Holidays 2008" on the front and toss it in your top desk drawer, day planner or somewhere else you can easily locate.
Budget
Write down the total amount you are able to spend overall as well as the name of every person on your gift list. Split your list into people you must buy for and people you'd like to buy for. You can then calculate how much to spend on average.
A few examples:
- If you set aside $50 from your next 4 paychecks you'll have $200 to spend. If you want to buy presents for 8 people that's an average of $25 per person.
- If you set aside $75 from your next 4 paychecks you’ll have $300 to spend. If you have 10 people to buy for, that’s $30 per person.
- If you set aside $100 from your next 4 paychecks you’ll have $400 to spend. If you have 12 people to buy for, that’s just over $33 per person.
Keep your calculations on a piece of paper in your wallet for easy access.
Start Early OR Set Aside Cash
We all know the feeling of waiting until the last minute and still having no idea what to get someone you truly love. Avoid this dreaded feeling by keeping your loved ones in mind at all times. Store the list of people you must buy for in your wallet. Next time you're running errands and pass a great sale, remember the people on your list.
If you don’t feel like shopping, don’t have the time, or if you’re simply not in the holiday mood yet, start setting aside some cash anyway. Withdraw some cash each paycheck from now until it’s time to hit the stores and keep it in your holiday envelope (keep this envelope in a safe and secure location). This way you’ll be putting cold-hard cash aside that you won’t risk spending on something else in the meantime.
Look For Universal Holiday Presents
If you find a great sale on fancy soaps and hand towels, or a basket of jams and chocolates, go ahead and buy them even if you’re not sure who will end up with it. This is something to do in moderation because you don’t want to end up overspending on gifts that go to no one. But a good deal is a good deal; take out your list and see if this great on-sale item could find a home with one of the people on your list.
If You Love This Time of Year…
If you love this time of year you probably get excited when you see the lights in the stores, the candles in the windows, the decorations, the seasonal music and signs exclaiming: “Isn’t your [family/spouse/friend] Worth the Price of [this over-priced gift]?!” And you think: “Yes! They are worth it! And tis’ the season!” And before you know it you’re out hundreds of dollars. If this is you, hitting the stores now, before the festive décor seduces your wallet, may be the smartest plan to avoid overspending.
If You Dread This Time of Year…
If carols, snowmen, Santas and color-coordinated displays are more likely to turn your stomach than warm your heart, online shopping may be your answer. If that’s the case, it’s definitely time to start browsing online stores. Purchasing gifts over the internet inherently involves shipping. Some stores are speedier than others, but it’s best to order early so you know you’ll receive your gifts on time. Also, by ordering early you can make last minute changes to your plans if something arrives broken or in no way resembles the picture you saw online. Keep an eye open for free shipping offers (like the one Amazon.com offers for purchases of $25 or more for certain books).
Don't Forget the Non-Gift Expenses
If you're planning to travel, throw a party or feed out-of-town guests, these costs add up. Don't forget to budget for decorations, gift wrap, ribbon, cards, tissue paper, gift bags… the list goes on and on! Finally, if you are planning to take off from work around the holidays, you may have to factor in a reduced paycheck. Planning ahead can save you many headaches.
Your Holiday Spending Choices
So again, why is early holiday shopping a frugal decision? Because like many frugal choices, it gives you time to plan ahead, shop around and avoid overspending. Perhaps more importantly, all of your holiday spending will not come out of one paycheck.
You have three options:
- Do all of your holiday shopping at once and use up a big chunk (or even all) of a paycheck.
- Do all of your holiday shopping at once and put it on a credit card (never a good idea).
- Spread out your holiday shopping by starting early (like now)!
