Smart holiday spending

The holidays can be a financially stressful time, especially when you add in rising prices. According to a survey, 35 percent of Americans take on holiday debt and many respondents say it will take at least five months to pay off. Imagine checking off everyone on your gift list and still having money left in the holiday budget. It's entirely possible — if you're willing to put in a little prep work before you head out shopping. As you get ready to head into the holiday season, create a thorough budget that includes all of your expected expenses, which can include attire for a workplace event, a tip for your mail carrier or travel costs. 

Use these four tips to help keep your holiday spending on track:

1. Make your list, and check it twice

Having a gift in mind before you leave the house or go online can help you stick to your budget. Otherwise, you may be tempted to impulse buy, which can often lead to overspending. Even if it's just $10 more than you planned, this can add up quickly if you do that for everyone on your list. 

Keep in mind that when it comes to putting gifts on your shopping list, you don't have to reinvent the wheel every year. If you've purchased a well-received present in the past, consider giving the same or a similar gift again. For example, if your teenage niece loved the $25 Amazon gift card you gave her last year, it could be a winner again this year.

2. Focus on what they'll love, not how much they'll think you spent

Spend what feels comfortable for your budget, not your recipient’s. In many instances, the gift of an experience — a day fishing at the lake or a virtual cooking class — is a thoughtful gift and can give your loved ones a fun, memorable activity to look forward to. It's okay to give based on what you can afford, and not about giving someone more "stuff."

3. Track your spending

When you create your holiday budget, you may want to consider opening a special savings account that is designated specifically for gifts and holiday-related expenses. If you do this early in the year, you can regularly deposit money into this account, helping set aside funds for your end-of-year spending. 

As you begin to make purchases, you’ll want to keep track of your spending as you go. With today’s technology, there are several shopping apps, like Spending Tracker or Spending Log, that can help you easily log all of your purchases whether you’re on your computer or mobile device. If you prefer pen and paper, you can keep a running total in a notebook and subtract each expense from your total holiday budget. 

4. Take advantage of credit card rewards and loyalty programs

A great way to save overall is to take advantage of the rewards and cash back programs your credit cards may offer. Some credit cards offer rewards that allow you to trade in points for discounted gift cards, for example. You can then use the gift cards to buy the presents on your list, or you can give them to friends and family directly. You can also look to your favorite stores for customer loyalty programs that may provide exclusive savings and offers.

Use these tips to manage your gift giving expenses and help make your holidays a little more stress free. Next step: take that momentum and use it to create financial resolutions that can put you in a position to make the new year the best one yet. 

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