Smart holiday shopping key to financial success
December 24, 2012
With Christmas fast approaching and less than a week left to buy the last few presents, single moms may be holding out for final sales to get good gifts without spending too much. There are ways of meeting both those goals without raising stress levels through the roof, chief among them is setting a budget, both in time and money.
Limiting expenses
A review by Visa and GfK Roper OmniTel found that between two-thirds and three-fourths of Americans wait until the last 10 to 14 days of the holiday shopping season to finish up their purchases. On average, respondents told the source they looked to spend between $200 to $400 on their overall holiday lists, but for moms operating primarily on college scholarships to afford some of the most expensive aspects of their lives, such financial outlays may seem unfathomable.
Apart from setting a spending limit for every person on a shopping list, the source also offered a simple calculation to determine what amount is safe to spend. No more than 1.5 percent of a consumer's annual gross income should go toward holiday shopping, so a mom relying on grants for single parents to get through school may want to be even more conservative. If she's making $30,000 per year, that means no more than $300 should go toward presents. If it's even less, along the lines of $15,000, that cap is cut in half to $150. From there, moms can break down how much to spend on each person, but must be mindful not to exceed those amounts.
Smart savings and planning
The RBC Canadian Consumer Outlook Index also recommended putting away the credit cards for the holiday shopping season, as these can result in major financial headaches in January. Just making minimum payments allows interest to continually occur and balances will linger, sometimes resulting in outstanding debts from the previous Christmas still being paid off when the next season rolls around.
If at all possible, a single mom should plan well in advance, opening a savings account just for holiday expenses as a new year's resolution, for instance. Special offerings at certain banks and credit unions will keep these funds from being withdrawn before next November, the Argus Leader reported, ensuring there will be enough money set aside when the next shopping season rolls around.
