Hold onto More Green, Stay out Of the Red This Season

It’s beginning to look a lot like Christmas, everywhere you go. Whether you celebrate Christmas, Hanukkah or Kwanzaa, you likely have been doing a lot of shopping lately, but are your holiday expenses in line with your budget?

’Tis the season of giving, and it is so much fun to give, but it is important not to go overboard during the holidays. I know, that’s two “buts” in a row. But smart finance is always predicated on a “but”!

A good year for receivers

According to the National Retail Federation survey, it’s going to be a good year for the receivers.

The annual survey estimates the average person will spend $804.42 this year, up nearly 5 percent over last year’s actual $767.27. The survey found consumers will spend an average of $459.87 on gifts for their family, up 6.5 percent from $432 last year, and $80 on gifts for friends, up from $75 last year.

Those celebrating the holidays also will spend more on gifts for their co-workers ($26.23 vs. $24.52 in 2013) and others like babysitters and even pets ($30.43 vs. $26.65). Spending on traditional items such as decorations and food will remain flat: According to the survey, consumers will spend an average of $104.74 on food, $53.68 on decorations. $29.18 on greeting cards and $20.30 on flowers.

Focus on your own financial situation

Whether your budget is more or less than the national average of $800 doesn’t really matter: What matters is whether or not your budget is reasonable for your particular financial situation.

Having a budget or a plan for holiday spending is the best way to keep yourself in check. And now is the time is to conduct a check before rushing out to make last-minute purchases and certainly before you decide to add more people to your gift list.

Virtually every credit card offers online information reflecting purchases made through the close of business the prior day. Even if you are convinced that you know how much you’ve spent, it is a good idea to add up those charges from your credit cards and bank statements. With online access, this task shouldn’t take too much of your time.

Last-minute shopping tips

If you find that you’ve already blown your budget, here are a few last-minute holiday tips to limit the damage.

Trim your gift list.

It is so easy to add too many people or go overboard on the kids. If you find that you’ve overdone it, consider unwrapping some of those gifts and returning them. It won’t feel right, but you’ll be glad you did when the holiday euphoria subsides and your left with bills.

Most stores have generous return policies and by returning the gifts quickly, you might avoid the trauma of opening your credit card statement and seeing that high balance, not to mention possibly incurring interest charges until those gifts are returned.

Save on the holiday party expenses.

Candles are less expensive than flowers. Consider a potluck instead of providing a meal. Offer one specialty cocktail or wine instead of a variety of drinks. Buy in bulk for the discount.

Shop strategically.

If you still have gifts to purchase, it’s probably time to go offline as shipping costs get more expensive with less time for delivery. Comparison shop online so you have a plan when you head out into the holiday bustle — decisive shopping is smarter shopping.

If you find a deal, consider buying multiples of the same item and mark several people off your list with one find. Consider making a charitable donation for those still on your list.

Take advantage of cheap gas.

If you are traveling during the holidays and haven’t purchased airline tickets yet, consider driving. Gas prices have dropped, so driving may be a cheaper option.

If you must fly, consider a flight on Christmas day when flights can be as much as 50 percent less than the day before or after. Airfares are expected to increase, so finalize your travel plans as soon as possible.

Red and green are the colors of the seasons but they have a way of lingering around for better or for worse long after all the relatives have gone home, the tree comes down and the decorations are boxed and in the attic. After all the festivities of this most wonderful time of the year, I hope you’re seeing more green (money) and less red (debt) in your finances!

Phoebe Venable, chartered financial analyst, is President & COO of CapWealth Advisors LLC. Her column on women, families and building wealth appears each Saturday in The Tennessean.