Sure, it's the season of giving, and you might feel compelled to spend more than you do during the rest of the the year to spread holiday joy. But if you use the holidays as an excuse to abandon good financial habits, you can easily spend too much.
Here are a few tips to avoid ending up in the poor house at the end of the year:
1) Set a budget.
Take some time to write down all the extra things you'll be paying for -- such as the restaurant meals you'll eat while out shopping, ingredients for holiday goodies that you'll make for friends and family, postage for holiday cards, cab rides home for late-night parties, and the list goes on. Set a spending limit and keep tabs so that you don't exceed it and end up without enough cash in your account to pay bills.
2) Don't go shopping without a list.
Don't go into a store without knowing what you're going to buy for friends and family this holiday season. Otherwise, you could get caught up in the excitement of the bustling stores, submit to high-pressure sales tactics or the frenzy of last-minute shopping and overspend. If you exceed your gift-giving budget, you'll have to cut back in other areas or rack up credit-card debt.
3. Put the credit cards away.
You might think you're saving money by buying all your gifts and holiday items on sale. But if you charge everything to a credit card and don't pay off the balance, those savings can easily be erased by the interest you'll be paying on that balance.
4. Don't over spend on shipping.
If you plan to do your shopping online, you often can avoid paying for shipping by having your purchases shipped to a retailer's brick-and-mortar store or by taking advantage of free shipping promotions. You can find free shipping codes at FreeShipping.org, or you can take advantage of Free Shipping Day on December 17, when more than 1,000 merchants will offer free shipping with guaranteed delivery by Christmas Eve.
5. Being to generous.
If you stuff a few dollars into the Salvation Army pot every time you go to a store or say yes to every colleague who is collecting money at the office for a special cause, your generosity could easily break your budget. Choose an organization or two that you particularly care about and an amount you're willing to give, then politely say no to other requests for money.
6. Don't buy bad gifts.
Don't waste your money on gifts that no one wants, such as useless gadgets, tacky Christmas apparel or the infamous fruit cake. Instead, buy a gift card if you don't know exactly what to give someone on your list. Opt for all-purpose cards, such as an American Express or Visa gift card, rather than store-specific -- unless you know the person's favorite store. In that case, don't pay full price for a gift card. Visit sites such as Plastic Jungle and Gift Card Granny for discounted cards.