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Five Ways to Prevent A Holiday Spending Nightmare

No one likes the January surprise. That’s when the credit card bills roll in and you’ve spent way more than you thought.

Millions of us do an epic fail on holiday spending budgets. There’s always one more item or one more person — or dozens — who get added to the holiday shopping list. That always leads to overspending.

According to a new survey by Joseph Grenny and David Maxfield, founders of VitalSmarts, a corporate training firm, “8 out of 10 people either overspend or have a spouse or partner who overspends during the holiday season, and nearly 56% say it is difficult to discuss holiday spending with their spouse or partner or avoid bringing up their concerns altogether.”

The remedy to overspending, for the most part, is communication with your spouse or partner. A solid discussion before the spending actually happens is a great preventative measure.

Honesty in a relationship is key to making this strategy work. Don’t hide purchases or use separate accounts to conceal buying. Discuss purchases ahead of time. Have a budget that you both agree to and can adjust jointly. Here are some other tips that Grenny and Maxfield suggest:

Talk early. Find a time to talk early about how you’ll deal with this year’s holiday spending.

Solve the right problem. Many couples don’t reach resolution because they discuss the wrong problem.

Communicate with love and respect. The most important key to solving problems with loved ones is to ensure they know that you respect and love the

Be willing to be wrong. Approach the conversation with an open mind.

Hold each other accountable. Once you reach an agreement, find a way to routinely keep track of spending.

Above all, simply do the math to see how much your spending would exceed your monthly income. If you just stick to a plan that allows you to spend according to your disposable income, you could avoid many future problems.

At the very least, if you stay within your income range, you will save money by not “rolling over” balances on your credit card, which will trigger finance charges. If you pay within a grace period, you are essentially getting free credit for that month.

Want another incentive to avoid overspending? Look at your savings “budget” first. How much do you need to save every month to cover emergency expenses, college and retirement savings? What about your 401(k) or 529 college savings plans? Sometimes you can “gift” yourself simply by making a contribution to savings.

That should always be your #1 goal, no matter what time of the year.

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