It's that unofficial shopping holiday known as Black Friday. To celebrate, I'll repeat a statistic that you may have already heard this year. The National Retail Federation estimates that the average consumer will spend almost $800 on their loved ones and another $100 on themselves during the holidays. To discover the most savvy tips for controlling holiday spending, I polled the wise denizens of several Motley Fool discussion boards.
So now, ladies and gentlemen, prepare yourselves to learn the top-secret strategies of the wisest Fools in the land. I am about to lift the curtain on the best ever, never-before-revealed tricks of the trade once reserved for only a few select investors. They slice, they dice, they come with a free set of knives. Drum roll, please ...
That's right, the best way to control your spending during the holidays is to set a budget and stick to it. There's no trick that lets you have your holiday fruit cake and eat it, too. Santa will not drop any extra spending money down your chimney. You cannot expect that your checking account will miraculously refill itself like Hanukkah oil while you shop for eight days straight.
Now that I've ruined your mood, let me try to cheer you up by sharing some of the ways that savvy Fools accomplish their holiday budgeting with a good dose of Christmas cheer.
Dedicated account. Accumulate funds for the holidays all year long by setting aside a certain amount of money each month. Some banks offer special Christmas Club accounts for this very purpose, but you can set up your own with a dedicated savings account or some mental accounting. The key is to separate this money from your regular spending reserves so it stays intact and available at the end of the year.
- Think Christmas all year long. Some Fools shop for Christmas gifts all year, which means they never face that end-of-year crush of spending and credit card bills. Their holiday gifts become part of their monthly budgets, and they may be less tempted to go overboard in a holiday frenzy.
This strategy lets you pick up holiday gifts whenever they go on sale. It also means you're listening to friends and relatives for gift ideas all year long, avoiding that after-Thanksgiving panic of thinking up all your meaningful gift ideas at once. Several Fools said they keep a small notebook with them all year to track ideas and record gift purchases.
Make a list, check it twice. Make a list of each person on your gift list and set a budget for that gift. Stick to it. Keep track of your actual gift spending to avoid the possibility that a little extra money here and there won't "accidentally" cause you to exceed your budget. Don't forget to keep track of small items like stocking stuffers, gift wrap, and postage.
- Give fewer gifts. This might seem draconian, but it's not as bad as it sounds. Sometimes it just happens naturally. As meirasmith posted, "I guess you realize, as you age, that life is not about things." So ask yourself whether everyone on your list needs a purchased gift. Maybe you'd rather have the gift of time, like a holiday dinner with your friends, instead of more stuff. Maybe your sister doesn't need any more sweaters, but she really needs a couple hours of help cleaning out the garage. Maybe you think the young kids get all the attention and gifts. Maybe you think the kids already get enough stuff.
As a related strategy, try making gifts for some people, especially friends. Home-baked cookies always get an enthusiastic response, and they win points for being budget-friendly. Making gifts also keeps you out of the stores and away from the temptation of spending.
- Watch everything. Spending all that time in stores can mean purchases you didn't plan, like those fabulous boots that were such a steal. You might also be pressed for time and tempted to order more Chinese takeout and pizza. In other words, all of your spending might go up during the holidays.
So, here's what Jubii's family does. They declare a spending moratorium on anything that isn't holiday related from mid-November through mid-December -- the credit card billing cycle that comes due in January. "No eating out, no new jeans or running shoes, no home-improvement projects, we just wait it out for those 4 weeks."
For other helpful tips on saving money around the holidays -- as well as year-round -- check out our personal finance-related newsletter service, Motley Fool GreenLight . A 30-day trial is yours absolutely free.