Is it time to stick to a holiday budget?

Cash Strapped Christmas

by Chantal King

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Credit cards straining the limit, over-due bills, pricey "must-have" gifts, the latest electronic gadgets on everyone's lists…wait a minute! Isn't this supposed to be the joyous holiday season? Learn to budget for the holidays and everyone will have a reason to celebrate.

Sometimes the thought of being practical about money goes against our wishes to be generous. Yet wouldn't our family and friends be happier if we lived within our means? Remember that it truly is the thought that counts, not the high-priced tag.

The first step is to take a look at your budget. If you don't have one, now is the perfect time to start. List all your monthly income in one column. Now list all your bills in another column from your mortgage payment, heat, water, electricity, and phone bills to the $3.50 you spend on lunch each workday.

Subtract the smaller total from the larger. But, there is the rub! What if your expenses meet or exceed your income? Now you have to put the holiday gifts on your nearly maxed-out credit cards.

Stop! Go back to your expenses and cut out whatever you can to free up some ready cash. Consolidate three or four high-interest cards on one 0% interest card, and don't charge more on it. Just keep paying more than the minimum payment to eventually eliminate your credit card debt. Most 0% interest offers last for only six to eight months, so be sure you transfer before the rates rise.

Pay cash whenever possible. It is much harder to overspend. When you run out of bills, it is time to go home. Plan what you will purchase before you go shopping. Look through ads, watch commercials, and even call ahead to make sure the item you want is still available. Most stores will even set it aside for you at the courtesy counter, saving time and hassles.

Compare prices. Often, the same "hot" item is much cheaper elsewhere or comes with a better incentive offer. For example, a new game I wanted to purchase for my daughter was a couple of dollars cheaper at Wal-Mart, but Target offered a free $10 gift card with purchase, so it ended up being a better deal. Now, I have two gifts instead of one!

Set aside a little money each month in a special holiday fund. Some companies will direct deposit a percentage of your paycheck for you, so you won't even miss the savings. Even $25-$50 a month can really add up!

Make your own gifts to stretch your gift-giving dollars. Consider making food baskets, cookie trays, craft items, etc. Use your imagination. Your thoughtful gift will be appreciated much more than a high-priced but useless gift that just sits in the closet or gets returned the next day.

If circumstances have put your family in debt, find out how to conquer your debt by creating a plan personalized to your family's budget and lifestyle.

Speaking of the day after Christmas, or whatever holiday you celebrate, that is the time to start planning for next year. You will likely have a similar gift list, so shop all the after-Christmas clearance sales for terrific bargains. Freeze candy and food items to assure freshness. Many wonderful gifts are half-priced or more for a quick way to save on next year's gift giving.

Keep your eyes open all through the year. Shop second-hand and thrift stores, garage sales, and the classified ads for unique gifts for that hard to buy for person on your list. Cruise the clearance tables, racks, and sections for gifts that only look expensive.

Think how happy you will be when the holidays are over, everyone has gone home, and you realize you don't have any outstanding bills. Conquer a cash-strapped Christmas by giving yourself the gift of a holiday budget, and you'll be debt-free when you welcome in the New Year.

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