Tame the holiday spending monster with a plan!

By planning ahead and being organized, families can avoid overspending their budget at the holiday season.

The average American family will spend $200 more than they planned to during the holidays. It is possible to tame this spending monster by being organized and going into holiday shopping with a plan.

First, Michigan State University Extension and MI Money Health recommends that you make a list of people you plan to buy gifts for. Next to each name put the amount of money you plan to spend. All too often, people will write down an item such as a shirt or blouse on the list without a dollar amount. Then when it is crunch time and the holidays are only a few days away, people will see an item such as a sweater on sale and buy it so they can cross the name off their list. In reality, though, the sweater, even it was on sale, was still more expensive than the blouse or shirt, which was the original plan.

Once the list is complete, add up the total. If that total is more than what you have available to spend, then it is time to cut back. In addition, while you are out shopping for this year’s gifts, keep track of exactly how much you spend. Add up the total. Divide this total by twelve. This will equal the amount of money that you need to set aside for next year’s holiday spending. Better yet, put this amount of money in a Christmas or holiday saving account at your banking institution. By putting the money in a holiday account, it will be protected from any attempt to spend it before the holiday season next year.

Pay cash for the gifts. There is the tendency to overspend with credit cards because total amount of the purchases does not come due for a month. With cash, shopping has to be done when the money runs out. Another way to avoid overspending is to shop with a budget-minded friend. Both of you will keep each other from impulse buying.

If there is a gift for mom or your sister, but it is out of your price range, why not ask another relative to go together and share the cost of the gift?

Think about giving a whole family or couples gifts, rather than individual gifts. For this plan to work it is important to discuss this ahead of the holiday season so no one is offended when the family gets one gift, instead of individual gifts.

Another way to avoid overspending at the holidays is to plan several single-minded shopping trips rather than one marathon shopping spree. In the frenzy of a marathon shopping spree, there is the tendency to overspend because fatigue sets in and you buy something just to cross it off your list.

One great way to plan ahead is to shop the day-after-Christmas sales. If the big family celebration is not until later in the holiday season, those post-Christmas sales are an easy way to keep the holiday spending in check.

What about giving the gift of your time? Make up a coupon book of tasks that an older relative would need or love to have done, such as snow shoveling or raking the leaves. Pick jobs that could be spread out throughout the whole year, making the gift of giving last all year. This is particularly a good idea for children to give, since they do not have a lot of money to spend on gifts.

All in all, the best way to tame the holiday spending monster is to be organized and had a plan.

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