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Pennywise Holiday

Ah, the holidays. It’s that magical time of year when families come together to deck the halls, trim the tree, shop for good little girls and boys, spread good cheer — and spend a small fortune. Studies show American families are spending more and more on Christmas every year. In fact, the average American spends a whopping $854 on gifts alone, according to an American Research Group study. When you add in decorations, party supplies, Elves on Shelves, reindeer sweaters and groceries for the holiday meal, the cost can quickly skyrocket far beyond $1,000.

To top it off, families with young children often end up spending even more. In 2013, mothers spent an average of $224 on gifts for each child, according to a national online survey by The Prowl. So for parents with three, four or more kids … well, you do the math. (Or don’t, because it’s scary!) It’s no wonder consumer counseling agencies see a 25% increase in the number of people seeking debt management assistance in January and February of every year.

If you want to ensure your January credit card bill doesn’t haunt you like the ghost of Christmas past, it’s time to take control of holiday spending. Here are some jolly-good tips to help you avoid the holiday debt hangover:

Set a Budget
You probably have heard this one a thousand times, but it is incredibly important. Set a budget. Then make a list of gifts you plan to purchase (including prices). If an item is a higher price than you expected, search for it at a lower price so that you can stay on budget. Let your kids know your budget too so that they aren’t disappointed if they ask for something too expensive.

Shop Early
Avoid pricey impulse buys by starting your shopping sooner. The closer you get to the holiday the more pressure you will feel. Prices also increase significantly near the big day. So start shopping now, even if it is just one or two items a week.

Pay Cash
Your credit card may seem convenient, but it can lead to overspending. You swipe and swipe, not realizing how much you’re spending. When you have cash, you are more likely to notice it dwindling. And with interest, you are actually paying way more in the long run for that doll or toy truck than you planned.

Draw Names
Your family might be big or small, but chances are you feel pressured to get a gift for every single person. This can make staying on budget difficult. To fix this, host a name drawing or Secret Santa party. Everyone will only have to buy for one person so the gift can be better.

Take Inventory
You may have more wrapping paper, ribbons, unused cards and gift boxes stored away than you realize. Figure out what you have before you go to the store and buy more.

Use Layaway
Store layaway has come back in recent years, making it easier than ever to make payments without using credit or paying interest. Make sure that you learn how layaway works at the store you frequent. Some stores require you pay the layaway balance by a certain date or only allow layaway items over a set price. Know before you go.

Understand Gift Cards
This might sound silly. After all, a gift card is an easy quick gift, right? Wrong. Some gift cards charge activation fees, and some expire in a matter of just a few months. Make sure you fully understand what fees will be charged to both you and the recipient, and make sure that you know the expiration date.

Save Throughout the Year
If you want to spread plenty of holiday cheer without busting your budget, it’s important to start saving early. Many banks and credit unions offer special holiday savings accounts that allow you to do just that. For example, Tampa Bay Federal offers members a Holiday Club Savings Account so members can set aside a little each week throughout the year to gear up for the holidays. Each October, the Holiday Savings funds are automatically transferred to the account holder’s primary savings account. It’s the gift that keeps on giving!

Nancy Smith is the Vice President Sales and Service at Tampa Bay Federal. Visit for more information on personal financial management, including budgeting and expense tracking.

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