According to the 2012 Bank of Montreal report, “Holiday Spending Outlook”, Canadians was expected to spend an average of $1,610 last holiday season – up from $1,397 in 2011. To be specific, an average of $674 was allocated to gift purchases in Canada. On the provincial front, it was forecasted that $359 was going to be spent by Quebecers. Unfortunately for some individuals, spending even half of $359 is beyond their means which usually leads to going into debt when they cannot afford gifts.
For those who wish to avoid the consequences of overspending on gifts, here are 8 practical money management tips to follow on an annual basis.
1. Make Lists
Although you would like to be generous and give everyone you know gifts at holiday time, you have to be realistic. Consider making two lists of individuals that you should buy a gift for and who you hope to give to. Understand that there is a big difference between the two lists. Individuals that you should buy for are family members and friends who are close to you and individuals that you hope to give to are people that have done something special for you during the year. When planning what to buy for family members and close friends, do not be shy to ask them what they need instead of guessing what they would like for a gift.
2. Prepare A Budget
With the two distinct lists that you have created, you can allocate an amount of money that you feel comfortable spending. The amount of money will be your budget for the gift giving season. There are a variety of ways to set your budget which includes: assigning a dollar amount for each person on your lists, taking a percentage of the money that you have coming in a month or using any savings that you have specifically for shopping. It is essential that if you have a budget, stick to it.
3. Save Your Money
Whether it is one month or one week before the holidays, it is never too late to save your money to buy gifts. Saving your money could entail anything from not buying your daily cup of coffee to avoiding purchasing an item of clothing for yourself. The money saved will go a long way to pay for bills that associated with holiday gifts.
4. Use Cash
With your budget in hand, be sure to go to the bank to withdraw cash. By using cash, it will prevent you for overspending and impulse buying. Leaving your debit or credit card at home will assist you in staying with your budget and having your list of individuals expand automatically.
5. Start Shopping Early
It is always wise to start your shopping early. By shopping early, you can take advantage of sales that are available in the fall months and it allows you to comparison shop for the best deals amongst the different retail stores.
6. Research Before You Spend
Shopping early affords you the ability to conduct research on items that you wish to buy. Not only do you have the power to comparison shop, you can use the web to search for reviews on what you are planning to buy. This can be handy when purchasing anything from books to electronics.
7. Shop Alone
To avoid overspending at holiday time, consider going shopping alone. Although it may be anti-social, shopping alone will prevent you from going to stores that you are not planning to shop in and spent your money. With your list and cash in hand, you can map out the stores that you need to enter to buy your gifts.
8. Use Gift Cards
Although some individuals may consider gift cards impersonal and demonstrates a lack of thought, the cards are great for adhering to budgets. Gift cards are available at different prices that could fit in anyone’s budget. It is up to you to select the best store to buy the gift card from based on what the person likes and their interests.
The holiday season is intended to appreciate family and friends which can be demonstrated by giving gifts that should be dependent on not overspending and going into an unmanageable amount of debt.