Five Things to Consider Cutting Out of Your Holiday List This Year

Most Americans, the Millennial generation included, spend more than we probably should at the holidays. It’s easy to get in the spirit of giving and get carried away. While all of us should be making a budget and doing our best to stick to it, there’s always something we didn’t plan for…like that last-minute gift for your brother you didn’t think was coming into town. As you’re preparing for the holidays this year, consider leaving these 5 items off the list.

 1)    Extended warranties – If you’re buying the latest iPad or the coolest new “craft ice”-producing refrigerator this year, try to resist the temptation to purchase an extended warranty to go along with it. An extended warranty is an insurance policy you purchase to protect against the failure of the product you’re buying. The warranty company is well aware that the likelihood of whatever you’re purchasing needing a repair during the warranty period is very low, and usually the cost of the repair is around what you would spend for the warranty in the first place. As well, many manufacturer’s standard warranties cover the same period of time as an extended warranty or your credit card issuer may even have a perk that covers you.

 2)    Signing up for store credit cards just to get a discount – According to this report by MarketWatch, 44% of U.S. shoppers racked up more than $1,000 in holiday debt last year. If making the minimum payment of $50 per month with a $1,000 opening balance and a 19% interest rate (common with store credit cards), it would take nearly two years to pay off the balance! If you can’t afford to pay for the gift with cash, then it’s not in your budget.

 3)    Overnight shipping costs – Plan ahead! Don’t spend extra money having gifts shipped overnight to make it in time for a certain holiday. If you know you have an occasion requiring a gift coming up soon, set a task on your calendar to shop for the gift at least a week in advance of the event so it can be delivered on time with no extra cost.

 4)    Gift wrapping services – If your wrapping paper skills are not on par, don’t fret. And definitely don’t pay someone else to wrap your gifts. Some stores offer a free giftwrap service, if so, then go for it. If it’s extra, skip the service and pick up a few holiday-themed gift bags and tissue paper. If that’s still too much effort, grab a bag of sticky bows and go to town. Keep in mind, it’s the thought that counts.

 5)    Greeting cards for everyone you’ve ever met – A good rule of thumb is, if they’re not family or you haven’t spoken to them in 2 years, they probably don’t need a holiday card from you. Holiday cards, while fun, can also be stressful and expensive. If you are trying to cut down on your to-do list and keep your budget intact, consider reducing the number of cards you send out this year or using an e-card delivery instead.

 The best thing you can do for your wallet during the holiday season is make a plan and stick to it. Include a miscellaneous category in your budget to take care of those unexpected items that always seem to pop up this time of year, so you don’t overspend. No matter what, remember the reason for the season and enjoy your time with family and friends.

- Margaret Gooley, CFP®, Worley Erhart-Graves Financial Advisors