THE BLOG
12/10/2010 02:11 pm ET Updated Nov 17, 2011

Smart Holiday Spending Keeps You in the Green, and out of the Red

It's that time of year again. Shops are buzzing, bells are jingling, and halls are being decked. With consumer confidence up and holiday spending set to be more robust than last year, many families are looking forward to a very merry holiday season. But how can they enjoy the holidays without suffering the inevitable New Year lament? Now is a great time for families to start a new holiday tradition and encourage wise spending and saving practices that can be used all year long. Consumers can follow the tips below to make this holiday season one that continues to give throughout the year.

Saving Tips
• Start saving early. The holidays come around the same time each year, so plan ahead. Put aside a little bit of cash each month and buy presents all year round so that you won't be surprised at the end of the year.
• Sit down with your kids and talk about your budget and holiday activities. They will understand more than you realize. Show them how to make their own budget for holiday shopping and help them set up and contribute to a savings account.
• Set a budget as a family. You don't have to worry about overspending if you've already set a price limit with each other.
• Show children the value of a gift. For example, let them how many hours of chores it would take to purchase a particular gift.
• Make a list and check it twice. It's easy to go over budget and spend more than you anticipate. Make sure you know how you'll be paying for each of your gifts and be sure to bring your list with you on your shopping trips to hold yourself accountable.

Spending Tips
• Use credit with caution. Remember, you aren't doing your kids any favors by spending lots of money during the holidays and going into debt. Think twice about paying for gifts with credit cards. Take into account interest and hidden fees (hiked up credit card interests/fees, shipping, taxes, even travel fees such as baggage check) if you do decide to use credit cards.
• There is such a thing as a free lunch. This is a simple exercise that really works. Bring your family together and write down all of your holiday activities (opening presents, singing carols, shopping, decorating, cooking, eating out). Rank them on a scale of one to 10, based on how much happiness those activities bring you and again on how much money you spend on those activities. You'll be surprised how many activities make you happy that cost very little, or that cost a ton and brings very little enjoyment. Decide as a family how you are going to spend your time and money this season.
• Volunteer. Teach your kids early the true spirit of the holiday season. Giving your time to help others is an invaluable lesson in building the holiday spirit. Helping others through volunteerism is free and is one less day or night you have to eat out or shop. Help your kids learn the joy of giving back their time and talents.

By including children in the decision making this holiday season, families will not only save money, but also teach kids lifelong lessons in financial literacy and responsible decision making. For tips on how to talk to your kids about savings year-round, explore the free online resource for parents called Junior Achievement $ave, USA. The lessons are sponsored by The Allstate Foundation and can serve as a great learning tool for children, teens and parents. Find out more about Junior Achievement at www.ja.org.