How not to go bust during holiday shopping

The holiday season is here again, a time for entertaining, attending parties, donating to charities, and of course, gift giving.

It should also be a time for budgeting. Careful planning can help keep holiday celebrations from leading to despair in January and February when the credit card bills start piling up.

• For more tips on budgeting and spending for the festive season, see our annual Holiday Financial Guide
  

Before it gets any later, experts suggest determining how much you can afford to spend on merriment by examining your earnings and monthly expenses. Consider saving strategies like bringing lunch to work or waiting for the new hot movie to come out on pay-per-view to pad your budget.

The average family will shell out an estimated $1,121 during the upcoming holidays, up 10 percent from 2015, according to accounting firm PricewaterhouseCoopers. Travel and entertainment will account for 42 percent of the total while the rest is targeted for gifts.

It’s up to each family to set its own priorities. How much will you pay for transportation to see loved ones? To host Christmas dinner? To play Santa for the kids?

Once that’s decided, creating a list of how much to spend on each item is key to staying on budget, according to Rachel Cruze, author of “Love Your Life Not Theirs: 7 Money Habits for Having the Life You Want.”

“Having a list is huge,” Cruze said. “It is going to keep you grounded.”

Experts say to shop around for the best deals. Stores are constantly having sales, and the internet is full of coupons and rebates. But be wary of some of the offers. For example, a website may offer free shipping on orders over $75. Don’t buy extra items just to reach $75 for the freebie. Ditto for store credit cards. The 10 percent you may save by opening a card will evaporate if you can’t pay off the balance when the bill comes due.

“Don’t spend money to save money,” Cruze warned.

She recommended using cash in stores when possible, and shopping with someone who will push you to stick to your list. Cruze noted that the physical act of actually handing over the money avoids overspending.

But there are still times when impulse can kill disciple. For example, your budget may call for only spending $50 on grandma, but there’s a sweater you know she’d adore that is $60. If you succumb to temptation and purchase it, cut $10 from the amount earmarked for someone else’s gift. Experts point out that those little extras can snowball over the course of holiday shopping, busting the overall budget. Don’t use one indulgence as an excuse to throw out your spending plan.

Cruze said that, if money is tight, rethink the number of people on your gift list. Consider eliminating gifts altogether.

“Tell your family and friends you can’t give gifts this year,” Cruze said.  “The holidays aren’t supposed to stress you out.”