It’s sweltering outside, and the holiday season is probably far from everyone's mind.
But it’s never too early to start planning financially. (Isn’t it winter in Australia right now, anyway?)
The holiday season is notorious for causing people to get off track with their spending and forget about their financial goals, according to personal financial planning experts with the Utah Association of Certified Public Accountants (UACPA). There’s nothing worse than a budget-busting post-holiday credit card bill to bring out your inner Grinch.
Start planning now, and your happy holiday mood can roll right into the New Year.
Following are five tips for Grinch-free holiday spending
- Join the club. Many banks offer special Christmas savings accounts that you can open with a very small initial deposit. Subsequent deposits can be made by direct deposit to help make sure you keep contributing. Some of these accounts are free and even accrue interest. Check with your bank to see what kinds of saving programs are available to you. Putting away money each month over the course of the year and then purchasing gifts with cash will help you avoid the biggest post-holiday letdown of all: the credit card bill.
- Make your list. As soon as possible, create a list of who you’ll be purchasing for this year. Make notes about what they might like, and then cross off names as you purchase. This will keep you organized and avoid double-purchasing for someone (which the recipient is unlikely to be unhappy about, but it will put a crimp in your budget plans).
- Plan for spending. This is code for “budget,” since that word always makes people cringe. You’ve made your list, now decide how much you’re going to spend overall and on each person. And, need we say it? Stick to the plan (the budget — whatever).
- Shop all year ’round. This is it, people: license to shop. When was the last time someone told you to be a perpetual shopper? Don’t question it, just run with it. Planning out who you’re buying for and what you’d like to give them allows you to take advantage of special sales and deals you might see throughout the year instead of having to make impulse buys in those last frantic days before Dec. 25. Important note: Pay attention to return and exchange policies if you’re buying well in advance.
- Use layaway. It just screams 1950, doesn’t it? Well then put on your pearls and get to the store, June Cleaver, because layaway is back in a big way. Take advantage of this opportunity to have a retailer hold your merchandise while you pay for it over time. After your last payment, you get to take your stuff home. These days you can find layaway options at national chains as well as local establishments. Be sure you understand the store’s policies and fees before you commit.
Most of us aren’t in the holiday mind-set just yet — no one is reaching for a nice, thick cup of eggnog after mowing the lawn on a hot summer’s day or jamming to Burl Ives on the iPod. But getting the jump on a debt-free Christmas could be the best gift you give yourself this year.
Wade K. Watkins, CPA, is a partner with Pinnock, Robbins, Posey & Richins, a local CPA firm. He is also currently serving as the president of the Utah Association of CPAs. Contact him at wade@cpaandmore.com.