BUDGETING DURING THE HOLIDAYS

As we once again approach the season of spending sprees, potent parties and bountiful bellies, The Consumer Affairs Commission wishes to remind consumers to be vigilant and exercise caution in the management of their money. Mindless spending may not only lead to empty wallets and unpaid bills but could impact negatively on your finances in the New Year. Here are a few tips from the CAC that will help you to budget your time and money and avoid the “tamarind season”, which often follows the Christmas season:

List All Incomes for the season

Write down how much money you have coming in. This list should include your salary, Christmas bonus, overtime monies and money from relatives and friends abroad.

List All Expected Expenditures

Write another list and itemize those things on which you must spend. This should include rent, gas, electricity, food, credit cards, school fees, monies for the day-to-day expenses in the upcoming month and other payments. The money you have left over is what you have to budget with for Christmas.

Next list the names of friends, relatives and co-workers whom you intend to give gifts. Put a few appropriate gift selections next to each name and place a spending limit for each person. Total the list and make sure that your gift choices are affordable. Include in your expenditure listing an item called miscellaneous, which will account for those items you forget to add to your list, such as decorations, wrapping paper, cards and postage, additional entertainment, extra gas for the car, increases in the telephone bill, tips for service people, additional baking and any other unforeseen expense.

Plan a Payment Method
Whenever possible, use cash or your debit card to help you stick to your budget. If you are unable to use cash, try to use only one credit card to help you track your spending.

Watch for Sales
Look out for Sales and discounts on those items you intend to purchase. Also, if you can afford to wait, post holiday bargains may offer you the best deals.

Follow your List
Cross out the names on your list once the gifts are purchased. This will help you keep track of your spending. Resist the urge to add any extras to the gifts already purchased.

Don't Rush instead Shop Around
Unplanned shopping tends to promote overspending and impulse buying. It helps to plan exactly when and where you will shop. Shop around, you may find it cheaper elsewhere.

Plan for Next Year
Start planning in January for next year's holiday shopping.

For those of you who decide to take out a loan in order to pay for Christmas remember to shop around and compare the APR (Annual Percentage Rate) for different credit agreements. If you decide to pay for Christmas using an overdraft facility, it's a good idea to arrange an overdraft limit with your bank first so that you pay a lower rate of interest. Another source of income for this season is the age old Partner saving method, ask your banker for a “draw” early.

Everyone runs into some unplanned expense over the holidays the trick to minimizing the occurrence of this is to heed our advice and plan. Budgeting your time and money this holiday season will help to keep the good cheer of the holidays well into the new year.