7 ways to avoid overspending this holiday season

According to Deloitte’s 2013 Annual Holiday Survey, there has been a rise in confidence among Americans when it comes to the economy, household finances and job security. This more positive outlook is leading to higher than expected gift buying and holiday spending this season. Total holiday spending is expected to increase 12 percent over 2012.

Despite this increase in confidence, the thought of purchasing gifts for family and friends can be daunting for many. That’s because things are still financially tight for many families across the country. While buying gifts on credit may seem like a good idea at the point of purchase, you may regret this when it comes time to pay your bills.

We’ve put together some tips to help you keep your holiday debt under control.

1. Reduce your gift list.

If you’ve found yourself with a gift list that is too long, suggest your family draw names so that each family member only has to purchase one gift. You could also cut out the adults and focus on kids. This will dramatically cut down the amount of money you will have to spend.

2. Estimate holiday expenses and set a budget.

Make a list of everyone you have to purchase gifts for, then figure out how much you can afford to spend on them. Set the dollar amount based on what you can afford this holiday season considering your current savings, income and other expenses. But don’t stop there. If you plan to have a holiday gathering, add up the costs of food and beverages. And if you’re traveling, those costs must be included, too.

3. Don’t delay.

Don’t wait until the last minute to go shopping. Starting early will give you time to shop around and ensure you are getting the best deal on your purchases. Another benefit of starting early is that it will give you more time to find exactly what you’re looking for and avoid impulse buys, which too often are more expensive and may leave you less than happy.

4. Make a list, and then shop around.

Write down the names of the people you plan to buy gifts for, and what you plan on buying. Then, take time to do some research on the best deals before you hit the stores. Smart phones have made comparison shopping much easier. However, when shopping online, shop wisely. Be sure you are purchasing from a secure site (look for the https:// in the URL) and review receipts for accuracy.

5. Use credit wisely.

If you’re using your credit card for your holiday shopping, be cautious. Don’t spend more than you can afford. Your credit card balance shouldn’t be a complete surprise when you open your statement in January. Try to use debit cards, and if that’s not possible, use the credit card with the lowest interest rate.

6. Take a “hands-on” approach.

If you can’t afford to buy gifts for everyone on your list, make homemade gifts instead. My family makes sweet dill pickles every year from our garden bounty and then we give the gift of a quart jar of pickles.  Most of our relatives much prefer these homemade goodies and it is a wonderful family tradition of doing something together to give to others.

7. Look for frugal activities.

The season is all about being together, and you don’t need to spend money to do that. Whether you’re making crafts or decorating cookies, get your friends and family involved. Another free winter family activity is an outing to see holiday light displays. Holiday concerts are also plentiful this time of year, and don’t have to be expensive. Finally, the holidays are the perfect time to teach your kids about giving back. Consider volunteering this season. It not only brings your family together, it’s a good lesson on compassion for kids and grownups alike.

The holiday season should be about joy, good company and lots of time with family and friends. There’s no need to overspend on those things. Don’t be tempted by the commercials luring you to buy. Instead, focus on what really matters. Happy holidays!