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Family Finance


The Secret to Happy Holidays: Spending with Discrestion



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12/01/2010 - As we enter the third holiday season after the onset of the "Great Recession", American consumers may be battling penny-pinching fatigue. We've scrimped. We've saved. When do we get to reward ourselves?

Sure, it would be fun to celebrate the holidays with a big spending binge, but if there's one lesson to be learned from the recession, it's the importance of fiscal prudence. Don't let the impulse to buy your way to happy holidays overrule your good judgment. Here are some tips for keeping your holiday spending within reason and the limits of your wallet:

Step back from the hype. Retailers want you to get caught up in the holiday spirit and spend with abandon. Instead, take a more mindful approach to holiday shopping and consciously commit to responsible spending. Reinforce your conviction by imagining how good it will feel to enter January with money in the bank rather than paying off credit card bills.

Make a firm budget. Think realistically about how much you have available to spend. If you're tempted to spend lavishly, force yourself to imagine the painful consequences of overextending yourself. Keep track of your purchases and monitor your progress to avoid getting carried away.

Narrow your list. If you've fallen into a trap of "gift-sprawl," make this the year to pull in the reins. Prioritize your list and give according to your ability.

Start early. Last-minute shoppers tend to spend more on impulsive purchases. Spreading your holiday shopping across twelve months is easier on your monthly budget. It's also easier to find deals in the off season when retailers are anxious to move last year's merchandise and make way for the new.

Shop on a cash-only basis. When possible, pay with cash rather than checks, debit cards or credit cards. The tangible aspect of spending cash allows you to see how quickly money goes and can help you stick to your budget.

Think outside the store. Save money by giving homemade gifts rather than store-bought items. Encourage your kids to skip the malls and give of themselves. Grandparents are likely to appreciate a child's artwork or helping hands far more than a scented candle.

Rethink excess. Does everyone in your family really need a dozen presents under the tree? Some large families and groups of friends choose to limit overall spending by drawing names so that each person receives one nice gift rather than buying for the entire gang.

Put people first. Our consumer society encourages us to get carried away with material things. Yet the most meaningful part of the holidays is spending time with the people we love and sharing our abundance with those less fortunate. It doesn't cost a thing to step back from the shopping rat race and savor the moments.

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Brokerage, investment and financial advisory services are made available through Ameriprise Financial Services, Inc. Member FINRA and SIPC. Some products and services may not be available in all jurisdictions or to all clients.

© 2010 Ameriprise Financial, Inc. All rights reserved.

File #108636

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