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How To Avoid A Financial Hangover

18856988_sI just love this time of year; it is full of joy, cheer and celebration. It’s a time to eat all the treats we want without gaining a pound because calories don’t count on holidays, right? And it’s a time to buy all the gifts we want for all the people we love, because money grows on trees during the holidays, right? Well, just like your doctor will set you straight with respect to that first misconception, it’s my job to set you straight with respect to the second one.
 
Although you wouldn’t know it from the way many people spend money around the holidays, many of us feel the weight of those gifts when we look at our bank and credit card statements in January. When the bills come, the first thought is often, “What?” followed quickly by, “How?” Well, let me tell you how—a lack of vigilance during the purchasing season. And although the holidays can be fun and joyful, if you start the New Year in debt, well, that joy quickly turns into stress.
 
Luckily, there are a few ways to capture the holiday spirit during this last week, without worrying about the Ghost of Christmas Future haunting your financials in the coming weeks.
 
Santa always says that he “makes a list and checks it twice, for those who have been naughty or nice.” Now, I am not saying to catalog who has been good to you and bad to you this year. But we can all follow the big guy’s lead. Make a list of the people you need to get presents for. At this point, you may find that you have fulfilled many of your obligations. Cross those people off your list.
 
Hopefully, you have already looked at your monthly budget and calculated your disposable income to determine how much you can afford to spend on presents. If not, do this right away and don’t forget that you will likely incur additional expenses for things other than gifts, like travel, extra food and drinks, and holiday clothes. Next, subtract from that total the amount of money you have already spent on holiday gifts and expenses. Then apply what remains of your discretionary budget to those who are still on your list of people to buy for. If you have $150 left, then divide $150 among the people remaining on your list, in whatever way you feel appropriate.
 
If it’s not too late, put dollar limits on gifts between you and certain people. Maybe you and your sisters can decide to spend no more than $10 on gifts for each other. Or you and your spouse need to spend less than the amount of years you’ve been married. Not only does this save on the wallet, but it can be a fun way to be more creative with gifts.
 
Just for kicks, I ran this by my kids and told them that Jill and I are going to spend less on them than their ages. At 14, 12, and 12—well, you can figure out how that discussion went over.
 
It is always best to plan ahead in ways that I’ve mentioned, but we are in the home stretch and we all know that feeling when we get into the 10th store of the day or the 15th website, and time is running short. It is very tempting to just bust the budget and get whatever is quickest and easiest. Do not cave! Decisions have consequences!
 
Some ways to avoid the purchasing pressure is to limit yourself by only using cash, and not bringing your credit cards with you when you shop. That will keep you within whatever budget you had planned. Also, give yourself time. Don’t let the stress and rush of Christmas Eve shopping blur the lines of your price limit. Try to take advantage of what’s left of the holiday season, shopping at specific stores for specific items, rather than just strolling the mall for hours hoping that something will jump out at you.
 
No commentary about holiday shopping would be complete without the mention of online shopping. This can be a great way to shop efficiently and effectively, from the comfort of your own home. Some tips? Price check at different sites to make sure you are getting the best deal. If you can purchase multiple items from one site to take advantage of any free shipping or sale offers, try to do so. Again, if you wait too long, you will find yourself having to pay a surplus charge to rush the shipping, so make sure you shop online sooner rather than later, and find your purchases early enough to take advantage of the cheapest shipping option still available.
 
Your holiday season should be about celebration. What’s even better than enjoying the celebration? Avoiding the financial hangover that usually follows.