Don't let spending fears ruin your holiday cheer

At this time of year, most people fall into two types: Those who look forward to the holiday season, and those who dread it. Many people end up in the latter camp because of money worries. You know how easy it is to overspend on holiday gifts, travel and entertainment and how long it can take your wallet to recover.

These tips might help move you from apprehension to anticipation:

Know your budget. First calculate what you can afford to spend overall and then decide how you'll spend the money – not the other way around. If you haven't been saving for a family getaway or a big-screen TV, those purchases could put you in debt for months to come. It's far better to arrive at a figure you can comfortably pay off, and tailor your purchases accordingly.

Practical Money Skills for Life, a free personal financial management site sponsored by Visa, features a Holiday Budgeting Center (www.practicalmoneyskills.com/learn/budgeting/seasonal_budgeting/holiday). with easy-to-follow budgeting, holiday entertaining and travel planning tips.

Don't forget the other 11 months. If property .tax is due in February or you'll owe income tax in April, you should be setting aside money right now, not racking up holiday debt. It's challenging, but if you budget all year for recurring expenses, you won't be caught off guard when your car insurance comes due.

Banish Santa guilt. Somehow many of us have bought into the myths that our kids will be disappointed if they don't get a mountain of toys and that neighbors and coworkers expect pricey gift certificates as a measure of friendship. Think of all the unnecessary presents you receive each year. Would you like someone any less without these gifts? Would they?

Along the same lines, ask your family (and your friends) about holding a gift lottery, where you draw names from a hat and concentrate your time, effort and money on getting just the right gift for that special person.

Be creative. You don't have to break the bank to bring happiness – the gift of your time is far more valuable than mere objects:

• If grandma's closets are overflowing, she probably doesn't need more sweaters but she might appreciate a “gift certificate” for you to clean the house or drive her to the dentist.
• Friends with a toddler will cherish free babysitting far more than a blender.
• Your teenager might love a new iPod, but you may get a bigger hug if you book a month of driving lessons on your calendars.

 

Be charitable. If you're agonizing over what to give someone who already has everything she needs, turn that $25 gift certificate into a

$25 donation to her favorite charity in her honor. It could change someone's life.

Make a list and check it twice. Before hitting the mall, list all the gifts you need to buy and how much you intend to spend on each. Clutch that list as you breeze through the impulse spending aisles. To stick to your budget, if you go over on one purchase you'll need to make up for it somewhere else.

 

Comparison shop online. Even if you decide to buy your gifts in person, websites like www.shopping.com and www.shopping.yahoo.com can supply creative gift ideas and help you find great deals.

A little planning – and a disciplined approach to holiday spending – can help ensure holiday cheer, not holiday fear.