Holidays on a Budget: Virginia CPAs Offer Shopping Tips

The holiday season is notorious for causing people to get off track with their spending and forget about their financial goals, say personal financial planning experts at the Virginia Society of Certified Public Accountants (VSCPA). There’s nothing worse than a budget busting post-holiday credit-card bill to bring out your inner Grinch. Start planning now and your happy holiday mood can roll right into the New Year.

Richmond financial planner Jim Shepherd, CPA, says one of the most important to things to remember is that much of the financial stress we face is self-imposed. 

“While we may not always be able to control our income, we can certainly control our expenses,” Shepherd said. “Our happiness is in our own hands.”

He says the first step as we enter the holiday season is to have an understanding of where your money is going each month. As opposed to simple budgeting, he advises consumers to have a working understanding of where their money is going. That understanding will allow you to begin making wise decisions about spending. 

“It is very easy for each of us to have in our minds a dollar number that we spend, but in reality we spend more because we do a poor job of tracking those expenses,” Shepherd said, “A wonderful solution is using free budget-tracking software that it will track your monthly expenses and give you regular updates. There is no reason not to understand fully where your money is going with a program this easy.”

Shepherd says it is important to recognize that people should not judge you on the cost of a gift, but the thought that went in to it.

“Your family and friends will ultimately have more respect for you if they know that you gave a gift in line with your abilities and less than what the gift actually is. Meaningful gifts do not have to cost a lot, but their meaning can be priceless,” he said.  “In my own family, we have pledged to make a gift for each of the family members this year and not buy a gift.”  

Additional Tips for Grinch-Free Holiday Spending

  1. Join the club. Many banks offer special Christmas savings accounts that you can open with a very small initial deposit. Subsequent deposits can be made by direct deposit to help make sure you keep contributing. Some of these accounts are free and even accrue interest. Check with your bank to see what kinds of saving programs are available to you. Putting away money each month over the course of the year and then purchasing gifts with cash will help you avoid the biggest post-holiday letdown of all: The credit-card bill.
  2. Make your list. As soon as possible, create a list of who you’ll be purchasing for this year. Make notes about what they might like, and then cross off names as you purchase. This will keep you organized and avoid double-purchasing for someone (which the recipient is unlikely to be unhappy about, but it will put a crimp in your budget plans).
  3. Shop year-round. Planning out who you’re buying for and what you’d like to give them allows you to take advantage of special sales and deals you might see throughout the year instead of having to make impulse buys in those last frantic days.
  4. Use layaway. Take advantage of this opportunity to have a retailer hold your merchandise while you pay for it over time. After your last payment, you get to take your stuff home. You can find layaway options at national chains as well as local establishments. Be sure you understand the store’s policies and fees before you commit.
LAST UPDATED 11/21/2011

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