Holiday Spending Hangover? Three Steps To a Cash-Only Christmas in 2008

If January’s credit card bill gave you a clenching feeling in the pit of your gut, take heart. Now is the perfect time to make sure it never happens again. Here’s a simple plan to keep you out of debt next holiday season.

Step 1 - Analyze the Past: Look at what you spent on the holidays this year. Gifts and travel may top the list, but don’t forget expenses associated with special events, meals, and postage or shipping costs. Even sending cards can get expensive. Remember, this only works if you’re honest with yourself about the amount you actually spent.

Step 2 - Plan for the Future: Based on the information from Step 1, make a decision about how much you will spend next year. Don’t get wishy-washy here. Set a figure without worrying about being able to buy everything next year. Your highly intelligent mind has eleven months to come up with creative ways to work within your budget.

Step 3 - Stick With It: Once you know how much you’ll spend, divide that number by eleven and set it aside every month. But I can’t afford that! I can almost hear you whining. All I can say is, if you can’t afford to set it aside now, you can’t afford to spend it come next December. You may have to re-visit Step 2 and adjust how much you’ll spend. If paying off those credit cards has you strapped so hard all you can afford is $10 a month, so be it.

I promise the holidays will be so much more abundant when you are free of the guilt of over-extending yourself financially. It becomes exceedingly satisfying to watch your money grow all year and then spend it all at once on the people you love!