How to keep holiday spending from busting your budget: Ask Bruce

Q: The holidays are a really tough time for me when it comes to spending. I try to keep it under control, but every year I seem to end up with a big credit card bill that I can’t pay off until May or June. What can I do differently this year?

You’re in good company. Consumer debt levels are soaring across the country. And it isn’t entirely your fault. Retailers have become incredibly sophisticated at selling you stuff you don’t really need, and can’t really afford. For example, they take a profit hit on a loss leader, like a flat screen TV, but make up for it by selling you printer paper or headphones, or, just capturing your data so they can market to you the rest of the year. That’s the game, and they’re winning.

Most people go into the holidays without a plan, and come out the other side with some regrets. But there are three things you can do to reign in spending that will significantly reduce your stress when the credit card bills arrive.

Write Down Everything on your Holiday Shopping List

The first step is to write down everything you can think of that will require you to swipe, insert or tap your card. A simple spreadsheet is best, but a Santa napkin will do too.

This includes gifts for family, friends, teachers, service providers and of course, pets. Estimate a number on décor for whichever holiday or holidays you celebrate – The Christmas Tree, the Kwanzaa Kinara, the Hanukkah Dreidel, the New Year’s Eve Confetti Canon etc.

Then, come up with a number for food and booze if you’re hosting, and add in the cost of gas, hotels, or airline tickets if you’re on the move. Consider any charitable donations you’ll make, the cost of a new little black dress or velour blazer for the company party, and tickets to the Nutcracker, Messiah, or A Christmas Carol, if that’s in your plans.

Now, take a deep breath and total it all up.

See? No wonder people max out their cards. There is a lot to factor in.

Make Trade-Offs Based on Priorities

The second step is to make some trade-offs based on what is most important to you and your family. A word of warning: This can be a brutal task, especially when you layer in family traditions and the emotions of the season.

Before you make any firm decisions, brainstorm any and all ideas about what to cut, even ones that seem utterly insane. And talk to your family too. They might have a different view of what the priorities are.

For example: Could you cut out gifts for the cousins? Eliminate gifts between spouses? Cancel the trip to see Grandma? (Sorry Grandma.) Have Breakfast for Dinner on New Year’s?

This is also the step when you figure out how you’re going to pay for it all -- if not by January, then certainly before June. A $2,000 credit card debt will take almost 4 months at $600 per month to pay off. Where can you find $600 a month? Ideas could include how to increase income (taking on more shifts at work, driving for Uber, selling your comics, couch or car), and how to cut expenses (canceling the cable, snipping the landline, slashing spending on eating out and clothes).

Stick to the Budget When Shopping

I know. I know. Sticking to a budget is really hard. But the good news is that it isn’t a budget you have to follow for the whole year, just four weeks. You can do almost anything for four weeks.

Print out your budget and keep it near where you keep your credit card. This constant awareness will reduce the risk of impulse buys, especially items you want for yourself. Capture what you’re spending as you go, so you can see if you need to make more trade-offs on the fly.

I also recommend that you carry around your credit card bills from last November and December. You can find them online, so just print them out and attach them to the list. They will serve as a cautionary tale on overspending again.

And finally: Stop. Just. Stop. A lot of overspending happens in the last few days before the holidays when you feel like you somehow haven’t bought enough and therefore haven’t loved people enough. So just stop.

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