Take control of holiday spending

What are your holiday shopping plans this year? American retail holiday spending totaled about $580 billion in 2012, according to the National Retail Foundation, up 3 percent from the previous year. This is clearly a time of year when people dig deep into their pockets to pay for holiday gifts and celebrations, but that doesn’t have to put a dent in your budget. The Minnesota Society of CPAs offers advice on how to make smart spending plans.

Plan ahead
Stores filled with glittering gift possibilities make it easy to give in to temptation and spend more than you intend. That’s why it’s 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 some 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 running up on your credit card balances. That’s why 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 your 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-fix 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 by paying cash for all purchases, making it impossible to run up big credit card bills. If you’re short on cash, use the credit card that has the lowest interest rate. Not sure which one that is? Find out now so you can minimize the balances you’ll pay 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’s watching, which is why it may be a good idea to shop with friends who will support your plans to stay on budget. Choose carefully. 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 together or renting 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. Don’t have a CPA? Visit www.mncpa.org/referral to find a CPA in your area.

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