Holiday finances – Are yours on the ‘Nice’ list?

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As we look forward to the joys of the holidays, it can be all too easy to get wrapped up in the excitement of the season and spend more than you can afford. According to a survey by Price Waterhouse Coopers, LLP (PwC), it is projected that the average household will spend $684 on gifts this year. But forgetting about your monetary realities, even for a moment, could leave you stuck with a financial hangover in the New Year. With some careful planning, attention to detail and creative thinking, you can avoid getting caught with your finances out of order. Here are a few simple steps to follow:

Talk before you shop
Before you set out on your holiday shopping excursion, have an open and honest discussion with friends and family members about what you are each comfortable spending on each other this year. Having established price limits not only makes it easier to stick to a budget, but also relieves the pressure to overspend.

Make a list – and check it twice
Once you’ve got guidelines established for gifting, stick to them! Make a list of family and friends that you’re buying gifts for and pick out potential items before you begin your shopping. Having specific items in mind before you begin shopping will help you avoid gifts over your price limits or making impulse buys that may put you over budget.

Plan ahead
You wouldn’t take a test without studying first, would you? Think of holiday shopping as a test on your spending habits. If you pre-plan your gift selection and research prices online before you set out to shop, you can compare them to in-store prices and prices available from other vendors online, which can be an easy way to save.

Open a separate savings account
If you are worried about overspending, it may be helpful to open a savings account that is designated only for funds to be used toward holiday spending. Using a designated holiday account will help to control spending and ensure that you don’t go over budget.

Consider giving gift cards
Gift cards are the perfect gift-giving idea for someone on a tight budget. You will be sure to spend exactly the limit you have set yourself. They’re also great if you’re unsure what to give the recipient — that way they can buy exactly what they want.

Be your own best influence
Utilize online banking to keep track of your transactions throughout the holidays and monitor your account activity. It’s also a great way to create your own resource for financial self-assessment after the holiday season passes, getting a head start on improving savings for 2015.

The holiday season is a process, and keeping on top of your finances every step of the way will help you to stay smart with your money. Taking these simple measures before the holiday season gets into full swing can help you stay focused on spending within your means when it comes time to shop.