Keep your Finances in Check this Holiday Season

Have you ever entered the New Year financially strapped because you spent more than you intended to over the holidays? If so, you’re not alone. The good news is that there are steps you can take today to help avoid “paying the piper” when the credit card bills arrive in January.

·  Write down the names of everyone on your gift list. This includes family members, friends, business associates, household service providers and so on. It may be helpful to create your list after you’ve determined how much you’re comfortably willing to spend on gifts this year. This way, you can keep your list controlled to a certain number of people and be more critical of those gifts that may not be crucial.

·  Set a budget and stick to it. Assign an affordable dollar amount to each recipient category, for example your spouse, parents, nieces and nephews and children. If something they desire costs more than what you’ve budgeted, ask someone else to go in on the gift with you or give the recipient a gift certificate that they can apply toward the item they desire.

·  Discuss your approach to holiday spending with your spouse, significant other or partner. If your money personalities and approach to holiday gifts differs greatly, look for common ground and agree to compromise to enable you to stay on track financially. If you’re worried your partner will spend too much from your shared account, talk about how overspending over the short-term on the holidays will affect your day-to-day finances and long-term goals.

·  Comparison shop for the best price. Thanks to the Internet and mobile device scanners, comparison shopping is quick and easy — and well worth your time. If you’re making an online purchase, take a moment to search for coupon codes for the site you’re purchasing from. Doing so can amount to some savings. Also, if free shipping isn’t available, see if there’s a free “ship to store” option to help stretch your holiday dollars.

·  Check out your local dollar store. You can often find high quality gift bags, bows, ribbon and tissue paper for cheap. If possible, go earlier in the season when the selection is at its best.  

·  Control holiday party costs. Gifts aren’t the only expense during the holiday season. Parties are another, especially if you host one. To help reduce costs, send out electronic invitations and host the event with a friend to split the costs. It also helps to keep the menu simple – and ask others to bring something to share. If you’re serving alcohol, offer a signature drink instead of stocking a full bar or ask guests to bring a bottle of their favorite wine.

·  Keep your holiday receipts together. This makes it easier for you to track your expenses and stay within your budget. It also makes it easy to locate a receipt if you find an item at a significantly lower price elsewhere and want to return or exchange your original purchase.

Staying on track with your finances during the holidays is all about being realistic about what you can afford. It may be tempting to overspend, but it’s important to think about the impact that doing so may have on your overall financial situation. Consider working with a financial advisor who can help you save money during the holiday season and throughout the year so you can work towards your short- and long-term financial goals.

Paul Fragala, CFP®, CIMA®, is a Private Wealth Advisor with Ameriprise Financial Services, Inc. in Andover, MA.  He specializes in fee-based financial planning and asset management strategies and has been in practice for 19 years. To contact him: www.paulfragala.com, 76 Main St., Andover, MA, (978)-474-9900.

Ameriprise Financial and its representatives do not provide tax or legal advice. Consult with your tax advisor or attorney regarding specific tax issues.

Brokerage, investment and financial advisory services are made available through Ameriprise Financial Services, Inc. Member FINRA and SIPC.

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