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) to 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 about $800 on holiday purchases. That’s a monthly expense of almost $67 spread out over the year, which is probably comparable to your other monthly expenses. Maybe it would be easier to pay other monthly bills once a year instead of 12 times a year, but that is an option that must be planned and budgeted. Same goes with holiday expenses. Plan now and you’ll thank yourself (profusely) later.

Get Organized and Budget

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 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!)

Regardless of whether you kept old receipts, before you take another step write down the total amount you are willing to spend and the name of every person on your gift list. You can easily calculate how much to spend on average. For example, if you set aside $150 of your next 4 paychecks you’ll have $600 to spend. If you want to buy presents for 12 people that’s an average spending of $50 per person. Keep your calculation on a piece of paper in your wallet.

Set Aside Cash

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. It may not be worth it to open a separate bank account just for holiday shopping but consider adding a little extra to your savings. Or alternatively, you can withdraw some cash each paycheck from now until it’s time to hit the stores and keep it in an envelope in a safe and secure location in your home. This way you’ll have tangible money 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 it 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 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.

If You Dread This Time of Year…

If you are sick of carols and choirs before the music hits your ear, and if snowmen, Santas and color-coordinated displays that appease and allure consumers of all religions, 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.

In Conclusion: 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 and shop around. Perhaps more importantly, all of your spending will not come out of one paycheck.

You have three options:

1. Do all of your holiday shopping at once and use up most (all?) of a paycheck.
2. Do all of your holiday shopping at once and put it on a credit card.
3. Spread out your holiday shopping by starting now.

Holiday spending usually includes more than just presents. If you’re traveling this holiday season it’s definitely not too early to book your flight. Sometimes it’s easiest to overspend on the little stuff: gift wrap, ribbon, tissue paper, cards, let alone the expense of entertaining. Chances are you will spend more than you budget over the holidays, but you can reduce those chances by starting now.