Skip to main content
November 29, 2016 | money-management

Have a Financially Savvy Holiday Season


How many times have you sworn “never again” when the big credit card bills arrive in January after your holiday spending? This year, break the cycle of high balances and take control of your holiday budget. That way, you can start the new year with no regrets — and perhaps no debt.

Review your records

Many consumers are enrolled in online banking or have old credit card statements. Dig out records to determine where your money went last year. Reviewing funds spent on gifts, groceries, dining out and travel could help you spot where you went overboard and can afford to cut back.

For example, if you spent a fortune traveling to a Colorado ski resort or Hawaii for a beach vacation, consider a getaway closer to home, or delay traveling until a more affordable time of year. Or, if you see large expenses at restaurants, consider making a pact with family and friends to take turns hosting big holiday meals and turning them into potlucks.

Make a Plan

Before you shop, build a budget. Figure out the recipient of the gifts, the items and prices. Also account for other expenses such as on travel and special holiday foods. Identify your revenue sources, calculate your spending limit and stick to it.

Remember that you aren’t obligated to give everyone a gift. If your shopping lists include more than a handful of people outside your immediate family, consider a thoughtful yet less expensive gift, like some homemade goodies. You might even think about giving your time instead — for example, you could offer to watch your neighbor’s kids so they can have a night out on the town. Or, you could teach your niece how to make your grandmother’s special fruitcake. After all, most people appreciate something heartfelt over an expensive bauble.

If you have a large family, think about a Secret Santa exchange, where each relative draws the name of another and buys a gift only for that person. Another suggestion is buying gifts that couples can enjoy together instead of an item for each person.

Avoid Impulse Buys

Retailers spend enormous sums promoting holiday sales, especially those on Black Friday, the big shopping day after Thanksgiving Day. But scratch the surface and you may find those deals are not necessarily what they’re cracked up to be.

Use price-tracking programs to monitor the prices of goods from reputable merchants. Other mobile apps can help you track your recent purchases and monitor sudden price reductions that could net you a refund or alert you to product recalls.

Use Coupons and Coupon Codes

Credit cards can be handy, but could leave you in debt if you can’t pay off the full balance at the end of the billing cycle. According to the Federal Reserve, cardholders who carry balances pay an average annual percentage rate of close to 14% in interest. Carrying a balance will drag your holiday spending far into the new year.

Be careful with Credit Cards

Credit cards can be handy, but could leave you in debt if you can’t pay off the full balance at the end of the billing cycle. According to the Federal Reserve, cardholders who carry balances pay an average annual percentage rate of close to 14% in interest. Carrying a balance will drag your holiday spending far into the new year.

One of the best strategies for avoiding holiday credit card debt is to set up a dedicated holiday savings plan. Putting money aside in advance, even for a few months, can ease the burden.

Save for Large Gifts

If one or more gifts will be a big purchase, plan to set some money aside each month to fund your holiday shopping. If you’re planning to give your teenaged son a new laptop, for example, you’ll thank yourself for already having some of the funds ready.

And don’t shy away from using “mind tricks” for your holiday savings. When you save money toward a holiday spending fund, you can think of it as putting your holiday spending on layaway in advance. Or, you could think of it as getting a down payment together for your holiday spending. Use whatever trick(s) work for you, so that you can be prepared in advance, and not regret your purchases next year.

Learn from Past Mistakes

Essayist George Santayana wrote, “Those who cannot remember the past are condemned to repeat it” — that applies to holiday spending, too. Use the lessons you’ve learned from past years to give yourself the gift of a debt-free holiday season.

Click below to learn more about low interest financing options!

Peter Lewis, NerdWallet © Copyright 2016 NerdWallet, Inc. All Rights Reserved

Ready to tap into your home's equity?

Home Equity Loans