Seven Happy Holiday Money Tips

Tax Planning

As we get ready to share Thanksgiving with our families, we may overindulge on our eating, but Ginita Wall shares seven great tips to keep you from overspending if you hit the stores over the Holidays.

I’ve been saving up for the holidays. Not money – I’ve been watching my waistline so I’ll be able to overindulge myself without guilt (with so many cookies to eat, I don’t know where to start).

As for finances, I’ll keep my holiday budget in check as best I can, but just as it’s easy to overeat during the holidays, it’s easy to overspend, especially if you buy on credit.

People spend about 15% more on purchases they pay for with a credit card than when they shell out cold cash or use a debit card that subtracts the purchase immediately from their bank balance.

To help you through the holiday rush and keep your spirits bright, here are seven tips to make the most of your money, and save on your taxes to boot – now there’s a real gift!

1. Make a gift-giving budget and stick to it

You don’t have to be a Scrooge to save money. Join with others to purchase big gifts, or give a family gift rather than individual gifts. If your family is big, draw names so that each person only has to buy one gift, or, only give gifts to the children in the family.

2. Save time as well as money

Doing your shopping during the day let’s you spend important time with your family at night. Take a longer lunch one day each week during the holiday season, and cut your lunch short the other days to make up for it. Or look for shopping bargains at your favorite Internet sites. Just be sure to shop early to allow extra time for shipping.

3. Spend strategically

Decorate on the cheap. Bundle pine boughs to capture the scent of the holidays, or buy wide velvet ribbon and tie bows on everything from doorknobs and banisters to candlesticks. The less you spend this holiday season, the more money you’ll have for fun the rest of the year.

4. Give from the heart and hearth

Bake bread, knit a scarf or make a personalized scrapbook. That tells the recipient you invested time and love – and that makes it priceless! If you buy gifts, be sure it’s something the recipient wants. More than 40% of people still have at least one unused holiday gift from last year in the back of their closet.  And speaking of closets…

5. Clean out your closets

Donate to charity the old clothes, sporting goods, books, and other household goods that you no longer use. Document these donations by making a list of the items at the time you donate them, and use ItsDeductible to compute the value of your donation. You’ll begin the New Year with new space in your life, and get a quick tax deduction to boot.

6. Prepare for next year right after the holiday

Buy your decorations, gift wrap, and cards for next year at this year’s post-holiday sales. And after paying off this year’s bills, put aside $50 to $100 a month for next year’s holiday presents. You’ll emerge from next year’s holiday rush debt-free. And while you are preparing for next year…

7. Do a rough calculation of your taxes for this year now

TurboTax TaxCaster 2013 is live, so you can use it to estimate this year’s taxes. The IRS treats income taxes withheld from your paycheck as if it were paid in equal amounts throughout the year. So if your calculations show you’ll owe money, you can increase the withholding on your last paychecks of the year to make up the difference.

Above all, remember to enjoy the holidays. Don’t stress yourself, spend yourself into debt or spread yourself too thin trying to create the perfect celebration. Memories make themselves when you cherish time with friends and family.

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