How to Determine Your Holiday Shopping Budget

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Get Your Holiday Shopping Budget in Order!

Get Your Holiday Shopping Budget in Order!Our natural inclination when this time of year rolls around is to spend now and worry about it later. After all, it’s the season of giving and who wants to stress about paying bills when you’re shopping for junior’s bike?

Unfortunately, that kind of thinking is what led our country (and a lot of the world) into the current financial funk. And if you’re really honest with yourself, what causes more stress – setting a budget ahead of time for the holidays and sticking to it as much as possible, or spending freely and not really knowing how long it’s going to take you to pay it off?

How do you make a shopping budget for the holidays?

Go back in time.

Check out your receipts from last year (chances are you bought a lot on credit cards, so this is easier than you think) and add it up. Be careful not to overlook things like cards, wrapping paper and any shipping costs if gifts had to be sent. Also, if you’re one of those people who runs around town looking for the best bargains, look to see if there was a jump in how much you spent on gas for the car and even things like lunches and dinners out because you didn’t have time to stop to cook.

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Lastly – and this is key – look at whether you spent more than you probably should have last year (did it take months to pay it off?) or were more or less on target.

Track changes.

Did you get promoted? Laid off? Got a bonus that you didn’t get last year? If everything is exactly the same from last year to now, the number for what you spent last year is a great place to start with your budget – as long as you didn’t overspend, of course. However, if anything has changed in your finances from last year to now, this is the time to reconcile those numbers.

If you’ve managed to make more money and not spend it, congratulations! Feel free to expand your holiday budget as you see fit. But if you find that you’ve lost money or are just spending more for whatever reason, now is the best time to tighten the belt on your budget. The best way to do this is with a percentage or equal amount across the board. If you find that you have $50 less to spend, for example, and buy gifts for five people, it just seems logical that everyone gets $10 less this year.

Pretend you’re at the grocery store.

You make a list when you’re shopping for food, right? Partially this is so you don’t forget anything, but it’s also so you have guidelines to follow and hopefully won’t deviate with impulse buys. The same thing should be done for your holiday shopping.

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Come up with a budget for each person on your gift list, then figure out what you want for them ahead of time and write it down. Not only will you be going out knowing what you want, but hopefully this list will tell you where you’re going as well. Obviously there are some cases where you just won’t know and that’s okay, but even for those, you still have to stay within your budgetary constraints. And if you just can’t avoid overspending for one person because you found the perfect gift you didn’t even know existed until you saw it… someone else on your list needs to pay the price by having their budget reduced.

Shop early, shop sales, shop smart.

A budget doesn’t have to be a downer that limits you so much that it ruins the holidays. If you find that you just don’t have enough to spend, don’t use that as an excuse to chuck the budget and just spend what you want, finances be damned. Instead, pay better attention to what’s out there and plan ahead.

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With all of the sales going on around the holidays, there are a ridiculous number of ways to stretch your dollar if you pay attention. Sign up for sales reminders and coupons online. Keep an eye on sales in your neighborhood by following sites like Pay attention to stores that offer you an extra percentage off when you sign up for their credit card. As long as there’s no annual fee or language that says you have to keep using the card or get a fee, consider it. You can always chuck the card later.

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