November 27, 2014
Connect
WNY Woman

How to Establish a Holiday Shopping Budget

In 2010, holiday spending forecasts were bleak. Groups like that National Retail Federation were predicting that 2011 holiday spending would increase only by roughly 2.5 percent from the previous year. Such a forecast unnecessarily worried retailers, who ultimately had prosperous sales that exceeded expectations significantly -- increasing somewhere between 5 and 6 percent.
Many of the shoppers who ventured out that holiday year may have overspent despite poor economic predictions simply because they didn't want to do without during the holidays. A 2011 study from Cardhub.com found that consumers accumulated $16.8 billion in credit card debt in the third quarter alone. Holiday debt is a condition that can be prevented.

In order to avoid joining the growing number of people accumulating massive amounts of credit card debt, holiday shoppers must establish a shopping budget. A budget helps shoppers control their spending, and the following are a few tips shoppers can employ to establish a budget that ensures this holiday season is as debt-free as it is festive.

* Remember the Alamo. While the Battle of the Alamo may have nothing to do with holiday spending, shoppers who have found themselves with a mountain of post-holiday debt in the past should learn from their history so they aren't doomed to repeat it. Look back on the previous year's spending habits to determine where you could have saved money. Keep this year's receipts so they can be examined next year. Gaining an understanding of your spending habits is a great way to discover which of those habits are unhealthy and which you can build on to become a more responsible shopper.

* Take shopping year by year. Just because you spent thousands of dollars last year doesn't mean you should it do so again this year. Let the past year dictate how much you can spend on holiday shopping this year. Shoppers who purchased a new home since last year, for instance, should not feel obligated to spend as much as they did last year, and neither should men and women who lost their jobs or took a pay cut since last year's holiday season. When establishing your budget, take all of the events of the last year into consideration. If you've had an especially successful year financially, perhaps this year you can spend more than last year. Just remember a holiday shopping budget should always be fluid and you should not feel pressured to exceed or equal the spending of previous years.

* Don't set a spending minimum. Many shoppers feel guilty if they don't spend X amount of money each year on gifts for friends and family members. But shoppers should not feel guilty if they come in well under budget, nor should they keep spending if they have purchased gifts for everyone on their list and spent less than they anticipated. Do not enter the holiday shopping season feeling you have to spend a minimum amount of money to show your loved ones how much you value them.

* Do set a spending maximum. Shoppers should, however, establish a maximum amount of money they can spend during the holiday season. A host of factors should be considered when determining how much you can safely spend. Those factors include your current financial situation and your job security. If you presently have a substantial amount of debt, eradicating that debt should take priority over holiday shopping. And if your working part-time or on contract or have reason to believe your job is in jeopardy, then you should, as much as possible, avoid holiday spending entirely. Once you have established a maximum amount you can spend for the holidays, do not exceed that limit and do your best to come in under budget.

More Articles

Your Daily Corner

Tip

Obession

Drink

Recipe