Monthly Finance Message:

Plan Now for Holiday Expenses

October 2015

Barbara O’Neill, Ph.D., CFP®
Extension Specialist in Financial Resource Management
Rutgers Cooperative Extension

The holiday season can be a financially challenging time. In addition to the cost of gifts for friends and family, many people have extra expenses for travel, entertainment, food, decorations, tipping, charitable gifting, and utilities. The holidays don’t need to cause financial stress. This year, while there is still time, take these 10 steps to reduce your stress, expenses and regrets:

  • Create a Holiday Spending Plan - Include gifts, of course, but also hidden costs of gifts such as wrapping and shipping. Also factor in other expenses noted above. Check out this great online Holiday Spending Worksheet.
  • Match Expenses to Income - Determine how many paydays are left from early October through mid-January. Then match holiday spending to your income, including any year-end bonuses, so expenses are paid with current income. For example, if you have $900 of holiday expenses and six paychecks, you’ll need to set aside $150 per paycheck
  • Play the Float - Time charges on credit cards so bills can be paid in full when they arrive. For example, if your statement ending date in the 3rd of the month and you buy things on the 5th, you may have six or seven weeks before payment is due.
  • Make a Gift List – List the names of people/families receiving gifts and determine a monetary value for each gift so the cost of all gifts stays within your overall holiday. Then stick to the list. See this helpful Gift Budget Worksheet.
  • Look for Bargains - Specific strategies include deeply discounted online deals with free shipping, online and print coupons, “door buster” sales at certain hours, and high-end thrift shops.
  • Set Realistic Expectations - If your budget is tight, have a conversation with family and friends about ways cut back. For example, consider replacing individual gift-giving with drawing names and buy one nice gift rather than many gifts.
  • Make a Gift - Homemade gifts show thought, effort, and love. Consider baked goods, fancy pillowcases, photos, artwork and embroidered, personalized items. “Gift certificates” for car washes, pet-sitting, house-cleaning, or baking are also appreciated and “White Elephant” exchanges are fun.
  • Use Credit Cards Wisely - Don’t charge more than you can repay. A bargain isn’t a bargain when interest is added to a purchase! Check your account statements to make sure all charges are correct and avoid unnecessary expenses such as late, over-the-limit, and cash advance fees and penalty APRs.
  • PowerPay Your Debt - If you run up an outstanding balance, use the free online Powerpay program to pay it off quickly. Powerpay generates a debt repayment calendar. As soon as you pay off a debt, you apply its monthly payment to another, generally starting with the highest-interest rate first.
  • Save Now for 2016 - Open a “Holiday Club” or similar savings plan with a financial institution or through an employer-related credit union. These savings plans usually start in October or November. Then make regular deposits throughout the year. Come Fall 2016, you’ll have the money you need without the stress of having to cut spending or use credit for purchases.
Now is the time to take charge of your finances to get the most out of the upcoming holiday season without financial stress. For more information, check out Budgeting for the Holidays from Military OneSource.


  1. Rutgers
  2. Executive Dean of Agriculture and Natural Resources
  3. School of Environmental and Biological Sciences