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Stay In Control Of Holiday Spending

University of Minnesota Extension

It’s easy to get carried away with buying gifts and extras at Christmastime, and many people will likely overspend. Now is the time for a holiday spending plan!

The main function of a spending plan, holidays or otherwise, is to take control of your money. Unfortunately, many people do not always understand how to effectively handle their “first line of control” or spending. Here are some control strategies: Spend less money than what is earned.

Spend to meet needs and wants not just to get a “bargain” or “good deal.” (Needs sustain life – shelter, food, clothing, transportation, health. Wants usually make life more comfortable.)

Spend without being influenced by social pressures, for example making purchases just to “keep up with the Joneses.”

Spend without being influenced by personal feelings – especially guilt feelings.

Spend so that money goes

for the purpose to which it was intended.

Simply put, a spending plan shows how money (cash income) will be used (expenses) for a given time, usually a month. Put holiday spending on your plan now to show how household income and expenses could be affected.

With the spending plan in place, ask yourself, “How will we handle the variety of strategies used by stores to influence holiday spending?” Common store strategies that influence and often increase consumer spending include layaway plans; short-term shopping club memberships; deferred billing on credit accounts; increased discounts with credit purchases; increased discounts with new credit accounts; weekly/biweekly sales promising low prices, and/ or limited editions of certain products.

These strategies and high-pressure sales people often cause consumers to change their “planned” spending decisions, resulting in overspending. Over time, unplanned spending will likely add to current debt if consumers do not exercise control measures when shopping. The most successful control is to spend money in amounts that are affordable to one’s income.

Spending plans will vary from household to household – there is no right or wrong way to plan – just balance income with expenses! Planning may take some time but it will be the best way to help you make positive choices and achieve financial stability.

– Shirley J. Anderson-Porisch is a family resource management educator with University of Minnesota Extension.

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