Tips to Curb Your Holiday Spending

Holiday shopping can get quite expensive. Many people have tips for minimizing the damage, and the tips are usually quite good. Some of these tips I shared last year, and others are new. To read all of my older tips you'll need to check out my previous article.

One great way to save money on your holiday shopping is to meet acquaintances for lunch rather than exchanging gifts. If you all agree to go Dutch, you'll be spending less than $20. Compare that to spending $10 on each of five acquaintances and you've already saved a bundle.

Exchanging gifts with coworkers, neighbors, or even your book club can get expensive. Suggest doing a secret Santa drawing or a white elephant gift exchange. This way everyone buys one gift, rather than several and many groups set a spending limit for these drawings.

Set up a holiday budget and stick to it. Make a list of everyone you'll be buying a gift for, and how much you anticipate spending on each person. Then compare that to what you can actually afford to spend. If necessary buy a few gifts with each paycheck rather than going on a huge spending spree.

Your holiday budget won't do you much good unless you stick to it. For example, if you plan to spend $40 on your sister, and you find her a few great things totaling $30, you don't absolutely have to spend another $10. If your spending ends up being less than expected it's ok. Your friends and family don't necessarily ever need to know what you spent.

If you are in a position to pay cash for your Christmas spending, do so. Or at least charge your purchases and pay off the amounts ASAP. If you let the balance sit you will be paying a lot of interest in the long run. For example, if you charge $500, and have a great 15% interest rate, but only pay $20 each month, it will take you two and a half years (30 months) to pay it off. Of course, not everyone can pay cash for every single thing or keep their cards paid off, but if you do so you are doing yourself a big favor.

Holiday shopping can be kept to a minimum in other ways - watch the sales, clip coupons, go in on gifts, etc. Perhaps the best thing to keep in mind is the thought behind the gift really does matter - not the cost. Even if you make someone a gift, or you spend time with someone rather than buying a gift, you are embracing the spirit of the holidays.