Take Control of Holiday Spending

Jun 22, 2016

MoneyLife100 What are your holiday shopping plans this year? American retail spending during the holidays totaled about $625 billion in 2015, according to the National Retail Foundation, up 3 percent from the previous year. This is the time of year when people dig deep into their pockets to pay for holiday gifts and celebrations, but it doesn’t have to put a dent in your budget. The Pennsylvania Institute of Certified Public Accountants (PICPA) offers advice on how to make smart spending plans.

Plan Ahead

When stores are filled with glittering gift possibilities, it is easy to give in to temptation and spend more than you intend. That’s why it is important to set a budget before you hit the mall so that you have some spending guidelines. Determine how much you can realistically spend overall, and set a maximum amount for each person on your list. Then comparison shop in advance—online or in advertisements—to see which stores have the best prices on the items you seek. Keep an eye out for coupons, including ones from online sites. Make notes on what you’ve spent as you go along to help you stay on budget. If you find you’ve spent too much, reassess your plans and decide how you can cut back on other gifts. By following these steps, you’ll have more control over your budget and no unpleasant surprises when you open your bills in January. 

Set Deadlines

The longer it takes you to pay off bills for holiday shopping, the more interest you’ll end up paying on your credit card balances. It’s a good idea to set a deadline—such as Valentine’s Day or St. Patrick’s Day—for making the last payment on your holiday bills. Keep that deadline in mind as you create a gift budget. 

Give the Gift of Time

We all tend to reach for our credit cards when we think of holiday treats, but many thoughtful and welcome gifts cost little or nothing at all. Young parents may be delighted with an offer to babysit for an afternoon or evening, for example. A recent college graduate may appreciate some cooking lessons and copies of easy-to-prepare family recipes. You could also surprise an elderly relative or neighbor with an offer to do household repairs or run errands for them. A young family member may enjoy a visit to a museum or local historic site. Other low-cost, thoughtful gifts include family photographs or other mementos in frames you’ve decorated yourself. By using your creativity, you may be able to come up with some truly memorable gift ideas that won’t bust your budget. 

Pay Wisely

One guaranteed way to stay on budget is to pay cash for all purchases, making it impossible to run up big credit card bills. If you’re short on cash, use a credit card with a low interest rate. Not sure which one that is? Find out now so you can minimize the balances you’ll be paying next year. Contact the credit card companies directly if you need a reminder of the terms of each account. 

Seek Moral Support

It can be easy to splurge when no one is watching, so try shopping with friends who will support your plans to stay on budget. Choose carefully, though. Not all friends may be a good influence when it comes to belt tightening! At the end of the day, treat yourselves by attending a free holiday concert or taking out a great video from the library. 

Your CPA Can Help

No matter what financial concerns you may have, your local CPA can help. Turn to him or her with all your financial questions. To find a CPA by location or area of expertise, ask family and friends for recommendations or use PICPA's CPA Locator

Original publication date: Dec. 1, 2013
About PICPA

The Pennsylvania Institute of Certified Public Accountants (PICPA) is a premiere statewide association of more than 22,000 members working in public accounting, industry, government, and education. Founded in 1897, the PICPA is the second-oldest state CPA organization in the United States.

Money & Life Tips are a joint effort of the AICPA and the Pennsylvania Institute of Certified Public Accountants (PICPA), as part of the profession’s nationwide 360 Degrees of Financial Literacy program.


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