The closer the holidays loom, the less time harried families have to buy gifts, plan seasonal events and make travel arrangements. Unfortunately, when time is at a premium, and you're forced to make last-minute decisions, it's usually your budget that suffers.
As an occasional procrastinator myself, let me share a few tips I've picked up over the years that can help take the expense -- and stress -- out of holiday planning:
1.) Before you start shopping, calculate how much you can afford to spend on the holidays as a portion of your overall budget. If your finances are in good shape, spend no more than 1.5 percent of your annual income. But if you're deeply in debt, can't meet your regular monthly expenses or don't have an emergency fund, this isn't the time to rack up additional debt.
2.) Once you determine an overall amount, tally up expected holiday-related expenses including gifts, decorations, new clothes and accessories, gift wrap, cards, postage, special meals and year-end gratuities. Don't forget travel-related expenses if you plan to leave town, and try to recall unanticipated expenses from last year.
If you're looking for ways to cut back, consider the following:
- Arrange gift lotteries with family members and friends so everyone concentrates their time, effort and money on buying fewer, nicer gifts.
- Speak candidly with friends, coworkers and extended family about placing a moratorium on exchanging gifts. They're probably feeling the pinch too.
- If the gift-giving gesture is important to you, suggest pooling resources with others to make a sizeable contribution to a charity you all believe in.
- If you're traveling just to get away, consider a "staycation" this year.
3.) Once you've determined your overall holiday spending budget -- and before you start shopping -- make a detailed list that includes:
- Everyone on your shopping list -- relatives, friends, coworkers, service providers, etc.
- A spending limit and a few gift alternatives for each person.
- How much you actually spend on each gift. If you overspend on one present, you'll need to make up for it somewhere else to balance out.
- What you gave each person -- to avoid giving them the same thing next year.
- What each person gave you to avoid "re-gifting" disasters later on.
- Other expenses (decorations, etc.).
4.) Some people relish hunting for bargains; others loathe it. Either way, here are a few money-saving tips:
- Clip newspaper and online coupons. Stores often match competitors' prices even if their own items aren't on sale. Plus, many consolidation websites post downloadable coupons and sale codes for online retailers, including: CouponCabin.com, CouponCode.com, CouponCraze.com, DealCoupon.com and DealHunting.com.
- Mobile shopping apps let in-store smartphone and tablet users scan product barcodes and make on-the-spot price comparisons, read reviews, download coupons, buy products and more. There are hundreds of popular apps including Price Check, ShopSavvy and PriceGrabber.
- If you're traveling for the holidays, note that many airlines charge $25 or more for each checked bag. Many stores and websites ship gifts for free, saving you hassle at the airport.
5.) If you're planning to give gift cards, keep in mind the following rules:
- Money loaded on gift cards is not allowed to expire for at least five years from the date of purchase or after funds were last reloaded.
- If the card itself expires but the funds in the account haven't, you can request a free replacement card.
- Inactivity and service fees may not be charged until after 12 months of inactivity; after that, only one such fee may be deducted from the balance each month. These restrictions apply to monthly maintenance or service fees, balance inquiry fees, and transaction-based fees, such as reload fees, ATM fees and point-of-sale fees charged by the card issuer. (Fees for activation or lost/stolen card replacement are exempt.)
- Fees must be clearly disclosed on the card or its packaging.
6.) A few additional tips:
- Carefully read purchase-return policies for deadlines, exclusions (e.g., for sale or clearance items) and restocking charges.
- Keep receipts. Many retailers will refund the price difference if an item goes on sale within a few weeks after purchase.
- Check whether your credit card agreement provides free product warranty extensions and/or price protection (i.e., will reimburse the difference if you find an identical item for less).
- One good way to use up your airline miles before they expire is to redeem them for cash or merchandise. Check out your airline's miles program website for details -- you might just find an appropriate gift for someone on your list.
- Similarly, if you're amassing reward points through your credit card, check out its online merchandise catalog or consider cashing out the points for cash or gift certificates.
- While handmade gifts can be greatly appreciated, if you're doing it to save money, don't overlook the cost of supplies and the value of your time.
And finally, consider giving the gift of time. Older relatives and friends don't need another box of chocolates, but they could probably use help with household chores, running errands or taking them to doctor's appointments. Plus, they would probably appreciate your company. Offer to babysit for harried parents, so they can run a few errands or simply recharge their batteries.
This article is intended to provide general information and should not be considered legal, tax or financial advice. It's always a good idea to consult a legal, tax or financial advisor for specific information on how certain laws apply to you and about your individual financial situation.