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Holiday Shopping Budgeting Help

The holiday season is known as “the most wonderful time of the year.” Ideally, your finances should stay in wonderful shape throughout the season, but this is hardly the norm. Consumer counseling agencies report that, in January and February, there’s a 25 percent increase in the number of people who need help with debt. This increase is largely fueled by the holiday shopping season.

If you create a holiday budget ahead of time, you can stay out of financial hot water. Here are six tips you can use to create a holiday budget and stick with it.

Start Saving as Early as Possible

Holiday shopping usually begins on Black Friday, but that doesn’t mean you can’t start saving money well before then. If you open a holiday savings account, you can deposit money into it throughout the year and even earn interest on the account.

Create a Spending Plan

Create a list of all your holiday-related purchases, whether they’re gifts, food, travel expenses or decorations. Decide how much you’re going to spend on each item. Once you’ve locked in a number for each item, you’re in a better position to avoid overspending.

Make a Shopping List

Now that you have a budget, it’s time to make a list of everyone you’re going to buy presents for. Make a note of how much you want to spend on each person. It’s possible that you’ll want to spend more money on certain people than on others. Prioritize your gift giving, and if you feel that your finances are stretched thin, don’t be afraid to tell some of the people on your list that you won’t be exchanging gifts this year.

Come Up With a Creative, Zero-Cost Gift

You can give a gift without needing to buy a gift. Make something of your own, using whatever natural talents you have. You can make a scrapbook, compose a short story or knit a scarf. The possibilities are endless.

If you have an old holiday present that someone gave you years ago, yet you never use it, consider re-gifting that present to someone who might actually appreciate it.

Don’t Wait Until the Last Minute to Shop

You want plenty of time to compare prices and find great deals. If you wait until the last minute, you’re going to be rushing through the store, exhausted and stressed out. You’ll also be more tempted to spend money on gifts without considering how much they cost.

Use Credit Cards Sparingly

If you have to use credit cards, don’t use more than two. That will make it easier to keep track of your spending.

The cards you use should have low-interest rates. Stay away from cards offered by department stores. If you have a credit card with no balance, use that one to pay off your upcoming balance in full. Use the other card for purchases that you intend to pay off over the coming months.

Spending money is arguably the most stressful part of the holiday season. If you begin the season with a financial plan in place, it will help take some of the burdens off of your shoulders. Use these six tips to create a holiday budget that works best for you.