MoneyRates Monthly Resolution #12: Be disciplined about your holiday shopping
December 07, 2011
It's here. That season of overindulgence.
Just as too many people step on the bathroom scales after the holidays and realize they've overindulged at the holiday dinner table, too many open up their credit card bills and bank statements in January and realize they overdid the gift buying. Here are four steps to help you have a soft heart on a firm budget:
- Start with a number. Take a top-down approach to holiday budgeting. Start with a total amount you can afford to spend, and then decide how to allocate that number among the people on your gift list.
- Choose your payment method wisely. Credit cards might seem the most convenient payment method, but they are also the most conducive to spending more money than you have. If you shop in person, keeping a limited amount of cash in your wallet and using only cash is a sure way of staying on budget. A debit card might be a good compromise between these methods.
- Trim your checking account. If you use the debit card approach, trim any excess cash out of your checking account. Put it in places like savings accounts, money market accounts, or CDs where it isn't as easily accessible. Don't go to the extreme of overdrafting your checking account, but reinforce your budget by limiting your access to funds.
- Do your research. Even if you like to do your shopping in person, doing research online first can save you money. A study by marketing consultants Shopper Sciences found that 42 percent of households plan to do more research online before holiday shopping this year. You would be wise to join that 42 percent. Also, keep an open mind when you do your research. According to Harris Interactive, most people start their research with a general search rather than going to a particular merchant's site. Doing this will keep you open to all possibilities.
Remember, the holidays should be more about generosity of spirit than generosity of wallet. As many people as you'd like to please this holiday season, don't feel it is your responsibility to make the retail community happy.
