With holiday shopping comes an extra dose of tempting, delicious-looking deals. For some reason, glitter, lights, bells, and cookies seem to impair judgement of our normally rationally-minded selves.
Consequently, budgets are cast by the way-side, and impulse-buying runs amok. Don’t believe me? A 2010 study done by Harris Interactive on behalf of the National Endowment for Financial Education found that 69% of the 2,738 participates, “[didn’t] set a budget for holiday shopping.”
Say what?!
Of all the known expenses you should plan ahead for, it’s your holiday spending! A budget is the crucial tie to keeping you grounded amidst all the fun and fervor. Hopefully you’ve put away a little money each month this past year in preparation for the spending blitz about to take place. But – whether or not you’ve managed to stock pile your pennies – staying within budget requires a special mind-set, and a few, key tactics.
Early Bird
So much of life’s stressful (and regrettable) situations can be avoided by simply planning ahead. When it comes to staying on budget, be sure to shop early so you can shop around. Giving yourself plenty of time will allow for more level-headed thinking, as well as time to weigh your options.
Compare this to a frenzied dash of last-minute shopping. Odds are you’ll be more desperate and willing to part with your money – no matter what the cost – when time is running out. Ideally, you should do a little here and a little there, steadily working down whatever list you might have. Waiting last minute (or forcing yourself to do it early but all in one day) only creates stress and higher check-out totals.
Don’t Be Fooled
During the holidays, it’s easy to get carried away or pressured into buying something you didn’t plan for. Keep in mind that stores and shopping malls have a very active plan for getting you to spend your money when you walk through their doors. Check out this CBS News report on how they do it, here.
It only makes sense to counter the attack on your wallet with a plan of your own. Know what you’re looking for and make a prioritized list. Just showing up and browsing every store for “something” is not a good way to shop. That’s when items “jump” into your cart you end up regretting the second you get home. It’s best to have a general idea of what you want to purchase and then focus on that goal.
If you’re really stuck and in need of inspiration, try asking the person ahead of time what they’re favorite gift was from past holidays. Their answer may give you a better idea of what to shoot for. What ever you do, don’t leave yourself open to buying anything and everything… or you will buy everything!
Cash Only
It’s so old-school, but a definite fail-proof nonetheless. If you don’t trust yourself with staying on budget, take comfort in knowing you can’t spend what you don’t have. Leave the card at home and withdraw a predetermined amount of cash for holiday spending.
Check out this quote from George Loewenstein, a professor at Carnegie Melon, and co-author of a study concerning how we decide to spend…
“Credit cards effectively anesthetize the pain of paying.You swipe the card and it doesn’t feel like you’re giving anything up to make the purchase, unlike paying cash where you have to hand over bills.”
Cash creates a deeper physical and psychological connection with your money – making it harder to part with for any, old thing. By forcing yourself to work with visible, tangible greenbacks, you’ll certainly check your list twice before deciding if your purchase is naughty or nice (I had to throw at least one hokey Christmas reference in).
Don’t let spending overwhelm you or your budget. Start early, have a plan, and don’t over-estimate your own sense of discipline. Stick with cash if impulse buys have frequented your cart in holidays past. Above all, don’t forget to prepare for holiday spending throughout the entire year.
Jesse Mecham is founder of the financial software company,YouNeedaBudget.com – because you do! Based on four fail-safe rules, Jesse’s revolutionary software teaches a method that helps people break the paycheck to paycheck cycle, get out of debt, and save more money faster. You haven’t budgeted like this.
