With Christmas fast approaching it’s easy to lose control of your holiday spending. Gifts for the kids, family, co-workers, teachers, neighbours, more for your kids and the extra costs that winter time brings. It’s also easy to start thinking of yourself as the Grinch when deciding how much money to spend and what gifts to give. Your finances are one thing that determines the way you and your family live. Controlling your finances during the holiday season is a very important part of your family’s financial future and you shouldn’t sacrifice that by overspending.
Where to Start
First step is reviewing your family’s monthly budget – if you don’t have one you can get one here Family Budget Worksheet. With winter there are additional costs you need to watch out for like snow removal, winter tires for the car, snowsuits for the kids and higher heating costs. You don’t want to spend all your money on gifts and then get a big hydro bill in January.
Once you have your budget sorted out make a gift giving list, then check it twice. List all the people you would like to get gifts for and then write down the total amount you have to spend. Divide the money you have among the people on your list, some you will want to spend more on so begin with those first. When all the money is divided, do not add anymore people or money!
Start early so you are calm and relaxed. Leaving it to the last minute, stressed and rushing around in panic will cause you to lose control and end up spending more, plus it’s not fun. Bring your list with you and stick to it! Don’t put any extra gifts in your cart or add people to the list.
When you go shopping have the total amount you have to spend on the person in mind and not what gift you want to get them. This will help you stay within your budget because if you see the gift you want to get and its more than you have budgeted you will likely spend more to get it.
What happens when thing get out of control?
Since just about everyone has a checking account it is important to know how to keep that account balanced properly. If you do not keep a close eye on your account then it could end up costing you a lot of extra money. If you write one check that you do not have enough to cover then it could spiral way out of control.
The fee for the insufficient funds (typically $45) which may cause another check to bounce, which causes more fees to be added on. This is one reason for keeping a close eye on your checking account. It really isn’t as hard as it may seem you just need to remember to keep a record of everything you spend no matter how small. Review your statements each month and compare them to your records.
The next big problem that most people have is with credit cards. It’s nice to be able to purchase items on credit, but you still have to pay for that with an added interest fee. You need to be careful how you use your cards. This is very important when it comes to controlling your finances. Try to limit them to purchases that can be paid off within the thirty day period to avoid high interest rates. If you do owe a large balance then try to pay extra each month, not just the minimum payment. The more you pay the more money actually goes towards the balance saving you on interest.
Other things to watch out for
There are also a lot of smaller ways that you can keep control of your finances. For example, be careful and control any extravagant gifts you may be thinking about, even if it is on your list. Phone bills can sometime be quite a shock so if you are making long distance calls keep a record so you will know how long you talk and how often. The same thing goes for cell phones, so be careful not to go over your minutes and data limits as this can add up very quickly.
It’s important to remember, it’s not how much you spend on the gifts that matter, and if it is important to the person receiving it then that’s their problem. Don’t feel bad if you can’t give expensive gifts or a gift to everyone, give what you can. It doesn’t have to be a physical items – a smile, a hug, volunteering or saying “Merry Christmas” is O.K. too. The holidays are about spending time with friends and family and you don’t have to go into debt to spend time.