The holiday gift buying season is almost upon us, so now is the time to make sure you don't end up with a credit hangover in January.
Expenses add up when you're not watching. Our expert says to take a page from Santa: Make a list and check it twice.
Renee Peerless and her family love Christmas, but she admitted back when they had only their oldest child that they might have overdone it.
"So we spoiled him more than we should have," she said. "Set the standard really high. Probably could gotten away with very few toys."
Now with two children and Renee staying at home, they're keeping an eye on expenses, which starts with figuring out how much you want to spend. Review your finances before you ever step foot in a store. Financial experts say a good rule of thumb is spending no more than 1.5 percent of your income.
Once you've established about how much you want to spend, start listing all possible expenses, not just presents. Here's a good budget template.
It's the little things that are budget killers, certified financial planner with Guiding Wealth Management Hannah Moore said.
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"It's the holiday gift wrap, the holiday parties you're going to be going to, hosting a dinner and the cost of food," she said. "All of those little things add up."
Here are some other hidden expenses you might overlook:
- Lights
- Cards
- Kids parties at school
- Teacher presents
- Baking supplies
- Tips for hairdresser and newspaper delivery person
- Party clothes
And if you're heading out of town, consider these:
- Luggage and parking fees
- Pet sitting
But even if you have a budget, it does no good sitting in a drawer.
"A budget is something you're visiting on a weekly basis," Moore said. "Or as you're going through the holidays and you're buying gifts, update it when you get back from the store."
The Peerless family decided to use cash — no credit or debit cards — this holiday season and they're doing something else too.
"We're trying to focus the attention less on presents under the tree and maybe more experience gifts," Peerless said.
Peerless might be on to something. Researchers say spending on experiences might give you more bang for the buck than spending on stuff.
"If you really look back at the holidays that really meant something to you, a lot of times it's about the family and the experiences you have rather than the 10 gifts you received," Moore said.
Apps like Snip-Snap for coupons, Sale Sorter, which shows you sales by location, plus Shopkick, Shop Advisor and eBay Now can also help you stay on track. Some store apps also promise discounts and special offers. There is also Santa's List, a holiday budget app and Mint, an overall budget app.
And take heart, Bankrate.com found that 54 percent of shoppers were able to stick to their budget last year. The National Retail Foundation says the average person plans to spend just over $800 this holiday season.
