Marla the Blogger

The holiday season has hit the stores full force and it's time to start thinking about my budget for gift giving. It's not exactly a fun exercise; I always end up wishing I could spend and give more this time of year. But I've learned the hard way from past experience that if we don't come up with a budget for what we can afford to spend, we'll regret it in January. Here are a few things we typically do when coming up with our holiday budget:

• Agree on what you're going to spend total and per gift BEFORE you start browsing. I've found we set a more reasonable limit if we haven't already started picking out presents in our head that are on the more expensive side. If I've already seen the "perfect" gift for someone for $60, I'm less likely to agree to a $30 limit.
• Keep and log receipts as you buy. It doesn't have to be a fancy spreadsheet, but at least right down the total cost of each gift when you buy it and document what the subtotal is for everything so far. This definitely helps with inching over the limit on individual gifts because you see how quickly the overages add up.
• Don't forget the "extras". Your budget should include everything you'll need to buy for the holidays: decorations, wrapping paper, charitable donations, food outside of your usual grocery budget, etc. That way you won't have any surprises when the bills come in January.
• Speaking of bills, keep the credit card use to a minimum. It's tempting when money is tight to just charge it and worry about it later. I know first hand, though, how tough it is to have to pay those bills off. At one point my husband and I had quite a bit of credit card debt. When we finally realized we needed to stop charging and pay our balances down, it took us almost 2 years to get everything paid down. Those bills weren't exclusively holiday related, but our spending during the holidays definitely contributed.

The first few times we did a holiday budget, my husband was resistant. Like most of us, he enjoys buying nice things for friends and family to show how much he appreciates them and felt restricted working within a budget. But after a few years of us overspending, he saw the benefit of budgeting in advance. Now he helps me set the budget and stick to it; it definitely makes January more enjoyable for both of us.

My family and I just got back from a much needed vacation. We hadn't taken a trip together since last year and it was great to get away. Like everyone else these days, we didn't have a lot of money to spend but still had a great time without breaking the bank. It helped a lot that my in-laws rent a house near the beach every year, so we had a free place to stay, but there are other ways to help travel on a budget:

• Pack your own food - on long car trips, we take healthy snacks like grapes and pretzels and pack a lunch, so we're only eating out for dinner. It saves money and is better for us!
• Travel off-peak times - my in-laws get a good deal on the house they rent because they get it earlier in the season. Sometimes the weather isn't as warm, but we usually have at least a few good days while we're there.
• Share costs - my husband's siblings and their spouses were with us as well, and each couple took a turn buying groceries and cooking dinner one night, so we only went out for dinner once.
• Keep entertainment costs down - you don't have to spend a lot of money on expensive attractions. The best time our son had all week was running on the beach and building sand castles. In the evenings, we had a great time playing cards and board games with my husband's family.

For us, the best part of a vacation is spending time together as a family, away from work and school and our day-to-day routine. And it was great to come back and not have a bunch of debt hanging over our heads from an expensive vacation. We're already planning another budget trip: camping this summer!

Have you ever heard the financial advice "pay yourself first" before? My husband is always fond of saying it when we're talking about our finances. The idea is that before you pay any of your monthly bills or spend money on daily expenses, you need to put some money aside for yourself first. I did an okay job with my personal finances on my own, but I hadn't been good about saving money. When my husband and I merged our money and our debts, he insisted that we set up a money market account that we automatically pay into from our checking account each month. The amount we pay has changed based on our overall finances; when things have been tight, we've lowered the amount some and when we've been doing well, we've upped the amount. No matter what we've had going on, though, we've always paid something into it every month.

I know it's hard to look at your monthly finances and figure out where to find "extra" money. So many bills like rent, childcare, car payments and insurance are very specific amounts with no way to decrease them. You won't get a few dollars off your car insurance bill next month just because you didn't drive your car as much this month. However, there are some areas, like groceries and gas, where what you do can have an impact on the money you spend. Here are a few things I do to try to shave off a few dollars wherever I can:

• Shop with a list - before you go grocery shopping, make a list of what you need and stick to it. When you're in the store, skip the aisles that don't have anything on your list in them. Avoiding impulse buys at the grocery store and buying only what you really need saves you money.
• Drive less - try to combine errands instead of making lots of individual trips. I try do so some quick errands (like dropping off a movie or picking up dry cleaning) on my way home from work. If I run a bunch of errands at once, I plan out the order to do them in to coincide with the most efficient driving route with the least amount of mileage and doubling back. It saves money on gas and wear and tear on the car. 
• Postpone big purchases - we've needed a second car since we moved back to Ohio in November, but we decided to put it off for a few months until our finances stabilized after our move. My husband has been taking the bus into work in the morning (he gets a free bus pass through his work) and I pick him up on my way home after getting our son from daycare.

Because we try to find ways to save a little money each month and have always "paid ourselves first," my husband and I have enough money that we can buy a used car and pay cash. This will enable us to get the second car we need without having to add another monthly bill, and allow us to get a good deal on the car because we're only paying for the car, not the car plus years of interest payments. And with the current state of the credit market, we're glad we don't have to try to get a loan right now.

I know when money is tight it's not easy to put some aside. There have been several months where I tried to convince my husband we just couldn't afford to put some money away. But I'm glad we've always found a way to put something into savings each month, even if it didn't seem like much at the time. In the long run, even small amounts add up to something that can make a big difference.