The holiday shopping season is upon us which puts gift-buying near the top of our activity lists. As a financial advisor for more than 10 years, I have witnessed what happens when a firm budget is absent from the gift-giving process. Inevitably, money is blown, savings accounts shrink and credit card debt increases.
This season, make sure you’re prepared to spend without blowing your budget. Here are five steps you can take now to spread cheer this holiday season without breaking the bank.
Set a realistic budget. The first step is to determine your available cash flow. If you have a surplus, create a list of the people you’re buying for and set your budget. It’s important to have a plan and stick with it—and not get caught up in a shopping frenzy moment.
Pare down your list. Make sure you thoughtfully select your gift recipients. You probably don’t need to buy a gift for each of your cousins. Many people care more about the thought than the gift, so a card and photo with a heartfelt personal note can be a nice choice. If you have a large family, another idea would be to initiate a drawing of names so each will have only one person to buy a gift for.
Be mindful on how you purchase. Many people find paying with cash will help control the urge to splurge. If this is you, then leave your credit card at home while you shop. If you do make your purchases with a credit card then pay off the balance every month.
Get creative. Consider giving homemade goodies like cookies or breads. Making a gift basket with your choice of cheese, crackers and wine can be a great substitute from buying a pre-made basket. Get together with friends for a gift-making party.
Having a gifting budget can offer a guilt-free shopping experience. The long-term benefit of remaining within your budget often outweighs the short-term gift-giving process. Household debt can be a big drain on quality of life. The biggest gift you can give yourself and your family is to stay out of debt.
Rob Rumley [http://fa.smithbarney.com/robert.rumley/] may only transact business in states where he is registered or excluded or exempted from registration. Transacting business, follow-up and individualized responses involving either effecting or attempting to effect transactions in securities, or the rendering of personalized investment advice for compensation, will not be made to persons in states where they are not registered or excluded or exempt from registration.