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Personal Finance: Avoid seasonal splurgingOpinionWritten by Chinkee TanSunday, 30 November 2008 22:01Christmas is here again. Just as holiday feasting can ruin not only our waistline but also our pocket,overenthusiastic holiday spending can bust your budget.According to a book I read, the best way to take the stress out of the holiday buying and postholiday “payingup” is to map out your spending strategy in advance.Here are five simple tips for managing holiday spending:
1. Review last year’s holiday expenses.
Keep records of your expenses. Many people are spending morethan what they are actually making. This will give you a good perspective on how much you actually spendas opposed to how much you think you do.Review your records—credit-card bills, checkbook and receipts—to get a rough idea. Includeeverything—not just gifts, like money you spent for decorating, entertaining, special clothing and travel.Further, don’t forget the interest, if any, that you paid on credit-card balance. If you no longer have therecords you need, try to estimate your costs.
2. Identify and avoid your triggers.
If you usually overshop when you go to your favorite mall and overeatif you go to your favorite restaurant, avoid them! Stop going there for a time so you can control your urge for spending.
3. Set realistic spending limits.
Make a gift list. Decide how much you want and how much you can affordto spend on each person. When you add up your costs and the total is more than what you budgeted, look for ways to scale it down. For example, you might want to create novel gift ideas instead of buying them, or consider drawing names rather than getting a present for everyone.Think out of the box. My wife and I simplified our shopping by cutting back the gift list and just informing allour friends and relatives that we have decided to donate to charities on their behalf instead of buying them presents.
4. Prepare a complete holiday budget.
To avoid postholiday spending remorse, determine a realistic budgetand stick to it. A spending plan will help you meet your family’s holiday needs without going overboard.Make a list and stick with that list.
Personal Finance: Avoid seasonal splurginghttp://www.businessmirror.com.ph/index.php?view=article&catid=28%...1 of 212/1/2008 9:36 AM
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