Holiday budgeting is a necessity if you enjoy bestowing thoughtful gifts upon loved ones. Getting carried away with the holiday gift-giving spirit, though, can lead to financial shock and dread in the New Year. Here are five ways to save money and make holiday budgeting easier.
Christmas Clubs
Once common, Christmas Clubs — savings plans dedicated to holiday budgeting — faded in popularity, but have undergone a recent revival. Banks and credit unions offer plans that allow customers to set aside a little each week to help pay for holiday gift purchases. Some let you set up automatic direct deposits of small amounts from your paycheck or from another account to the Christmas Club account. When it’s time for holiday spending, you’ll get the amount you stashed away plus interest.
Some retailers are also embracing the Christmas Club concept. For example, Sears and Kmart offer a Christmas Club card. Shoppers add money to the Christmas Club card during a set period, and according to their 2010 plan, Sears/Kmart will pay 3 percent in rewards, up to $100, based on the value on the card.
Layaway
Layaway is an old retail standby where the store sets aside an item that you pay for in installments. Once the item is paid off, you can bring it home. Typical layaway terms range from 60 days to eight weeks. Payments are usually required weekly or every other week. There may be a cancellation fee assessed if you don’t complete the payments. If you miss a payment, the item will likely be put back on the sales floor.
Layaway is a good way to buy big-ticket items when credit cards are maxed out, or when you’re aiming to reduce credit card debt. When you are strictly adhering to a monthly budget, layaway also offers an opportunity to buy a hot item early in the season that may go out of stock as December 25th approaches. If the layaway fee is higher than your available credit card rate, though, it may not be worth it.
Mobile phone apps
Make your smartphone a device for holiday budgeting by downloading simple apps that track your holiday budget and shopping. Tools like Christmas List and Better Christmas List for the iPhone help you keep track of who you need to buy for and how much you have left to spend.
Having these lists easily accessible while you’re shopping is a great aid when you’re determined to stick to a budget. Other apps let you compare product prices at both brick-and-mortar and online retail sites.
Do it yourself
Sometimes a memorable holiday gift is made, not purchased. If you’re skilled at knitting, woodworking, or other crafts, why not focus your talents and make your own holiday gifts? Even if you’re not the creative type or don’t have much time to make gifts, you could bake some cookies, have family photos framed, or create mini photo books.
Another option is to buy handmade gifts. Check out Etsy.com, a site where craftspeople of all types sell their wares — some will even make items to order. You could also give a pledge to do some work for a special someone such as cleaning out a garage, painting a room, or landscaping a yard.
Holiday Budgeting 101
By Peter Fabris
Holiday budgeting is a necessity if you enjoy bestowing thoughtful gifts upon loved ones. Getting carried away with the holiday gift-giving spirit, though, can lead to financial shock and dread in the New Year. Here are five ways to save money and make holiday budgeting easier.
Christmas Clubs
Once common, Christmas Clubs — savings plans dedicated to holiday budgeting — faded in popularity, but have undergone a recent revival. Banks and credit unions offer plans that allow customers to set aside a little each week to help pay for holiday gift purchases. Some let you set up automatic direct deposits of small amounts from your paycheck or from another account to the Christmas Club account. When it’s time for holiday spending, you’ll get the amount you stashed away plus interest.
Some retailers are also embracing the Christmas Club concept. For example, Sears and Kmart offer a Christmas Club card. Shoppers add money to the Christmas Club card during a set period, and according to their 2010 plan, Sears/Kmart will pay 3 percent in rewards, up to $100, based on the value on the card.
Layaway
Layaway is an old retail standby where the store sets aside an item that you pay for in installments. Once the item is paid off, you can bring it home. Typical layaway terms range from 60 days to eight weeks. Payments are usually required weekly or every other week. There may be a cancellation fee assessed if you don’t complete the payments. If you miss a payment, the item will likely be put back on the sales floor.
Layaway is a good way to buy big-ticket items when credit cards are maxed out, or when you’re aiming to reduce credit card debt. When you are strictly adhering to a monthly budget, layaway also offers an opportunity to buy a hot item early in the season that may go out of stock as December 25th approaches. If the layaway fee is higher than your available credit card rate, though, it may not be worth it.
Mobile phone apps
Make your smartphone a device for holiday budgeting by downloading simple apps that track your holiday budget and shopping. Tools like Christmas List and Better Christmas List for the iPhone help you keep track of who you need to buy for and how much you have left to spend.
Having these lists easily accessible while you’re shopping is a great aid when you’re determined to stick to a budget. Other apps let you compare product prices at both brick-and-mortar and online retail sites.
Do it yourself
Sometimes a memorable holiday gift is made, not purchased. If you’re skilled at knitting, woodworking, or other crafts, why not focus your talents and make your own holiday gifts? Even if you’re not the creative type or don’t have much time to make gifts, you could bake some cookies, have family photos framed, or create mini photo books.
Another option is to buy handmade gifts. Check out Etsy.com, a site where craftspeople of all types sell their wares — some will even make items to order. You could also give a pledge to do some work for a special someone such as cleaning out a garage, painting a room, or landscaping a yard.