sealPurdue News

December 5, 2001

Holiday spending made easier by budgeting

WEST LAFAYETTE, Ind. – While the thought of holiday spending may weigh heavy on many shoppers, a Purdue University expert says wise men and women will plan before they buy this season.

"Many people are concerned about overspending for the holidays," says Janet Bechman, Purdue Extension consumer sciences and retailing specialist. "To avoid this problem, set a holiday budget and keep track of what you spend. Include all the expenses you anticipate, such as gifts, food, entertainment, decorations, travel, holiday cards and postage."

Start by remembering how much you spent last year during the holiday season, Bechman says. Calculate what percentage of your annual income was applied to holiday giving and compare it to the amount you spent on bills throughout the year.

Once a budget is in place, shoppers need to decide how they will pay for purchases. Credit cards are used more frequently between Thanksgiving and the first of the year, Bechman says. Since many purchases are paid by credit, she says shoppers should keep some things in mind:

  • Credit card companies may let you skip a payment during the holidays. Bechman recommends against this because usually the interest continues to accumulate. Pay at least the minimum balance. If the minimum payment cannot be made, determine when you can make a payment and let your creditor know before the bill is due.

  • To more easily track spending, use one credit card for holiday purchases. Choose the one with the lowest annual interest rate, she says. An easy way to stay within a budget is to write your limit on an envelope and keep it handy. When you make a purchase, subtract the amount from the limit and place the receipt in the envelope.

  • Only charge what you can afford to pay off each month. Pay close attention to the credit limit and understand the charge card guidelines.

    Bechman says another holiday cost-cutting idea is to avoid impulse shopping.

    "Start shopping far enough in advance that you will not be pressured to buy the first item you see in a store," Bechman says. "This allows you to compare prices at different stores and take advantage of sales."

    The slowing economy may force some families to cut back on spending this holiday. But that does not mean the holidays have to change dramatically. Bechman suggests that families should discuss what is important for them during the holidays and make small changes to traditions.

    "If you decide to change your usual holiday celebrations and rituals, talk to your family ahead of time," Bechman says. "Explain why the changes are being made. Let your family know you are trying to add more meaning to the holidays rather than take it away."

    Bechman says there also are gift-giving strategies that can help stretch your money. Family members can draw names and set a price limit on how much everyone spends. She also suggests splitting the cost of an expensive gift with someone else. One gift can be given per household rather than purchasing individual gifts, for example.

    "The most cherished gifts often involve someone's time and thought, not large amounts of money," Bechman says. "Give gifts of service such as babysitting or car washing. Offer a particular talent such as photography, or make something meaningful. Give family keepsakes or pictures as gifts to create memories as well."

    If entertaining family and friends consumes a large part of your holiday budget, consider pitch-in dinners instead of doing all the cooking, Bechman says. You also could invite people for dessert and coffee or a small luncheon or breakfast.

    Even though the holiday season is under way, it is not too early to start planning for next year, she says.

    "Think ahead and take advantage of sales after the first of the year," Bechman says. "Good budgeting should take place all year long, not just at the holidays."

    Purdue Extension offers a Web site with resources and publications on managing through challenging financial situations.

    Writer: Jennifer Doup, (765) 494-6682,

    Source: Janet Bechman, (765) 494-8309,

    Ag Communications: (765) 494-2722; Beth Forbes,;

    Related Web site:
    To Your Credit: Fact Sheet 8 - Controlling Your Holiday Credit Use

    Purdue News Service: (765) 494-2096;

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