Four Steps to Create and Keep a Holiday Budget

Unless you’re among a select group of people, sitting down and creating a budget does not sound like very much holiday fun. Nevertheless, in tough economic times, the Better Business Bureau recommends mapping out your spending in November to help ease the strain of a financial holiday hangover in January.

According to a survey by Consumer Reports, shoppers planned on spending about $699 over the holidays last year, but, in a follow-up survey, admitted to actually spending closer to an average of $811, 16 percent more than planned. Creating a budget, and being disciplined enough to follow it, is one of the best ways to avoid overspending during the holidays. 

“While sitting yourself down and crunching numbers isn’t the most festive way to spend an evening, because of the current economic climate many can’t afford to spend with abandon,” said Steve J. Bernas, president & CEO of the Better Business Bureau serving Chicago and northern Illinois. “Building a budget and sticking to it over the holidays will stave off a painful financial burden.”

The following are four steps recommended by the BBB to consider when creating a budget this holiday season:

Step One: Consider your Income.

The first step is to measure how much money is coming in.  Add up your monthly salary along with your spouse’s and any child support payments, dividends or interest payments and other sources of income.

Step Two: Add Up Regular Monthly Expenses.

Adding up expenses is usually harder than determining your income because there are so many more factors to consider. Start with your rent or mortgage, utilities and credit card payments. Also factor in other expenses for gas and car maintenance, healthcare and groceries. A full list of monthly expenses to consider is available at www.bbb.org  

Step Three: Estimate Extra Holiday Expenses.

A lot of little purchases have a way of adding up over the holidays and it’s important to consider all of the expenses of the season including:

• Gifts - Make an itemized list of everyone you want to buy presents for and estimate how much you’re willing to spend for each. This includes presents for family, friends and coworkers. Also consider the cost for holiday cards and postage.

• Entertaining - Entertaining is big over the holidays. Think about who you’ll be having over and also budget for any food or beverages you might need to bring to someone else’s party. Also consider the costs for eating out and going to the movies—both popular expenses over the holidays.

• Decorations - Take stock of what you already own and then consider any additional spending you might need to make for a tree, lights, ornaments, wrapping paper, etc.

• Travel - If you’re heading out of town for the holidays, consider the cost of travel including any car maintenance or pet boarding if applicable.

• Charitable Donations – Remember the holidays are a time of giving, so budget in how much you plan on donating to a worthy cause. You can learn more about being a savvy donor from the BBB Wise Giving Alliance at www.bbb.org/charity

Step Four: Revisit, Evaluate and Revise Your Budget Along the Way.

Once you’ve added up your income and your expenses, it’s time to compare. If more is going out than coming in, it’s time to go back over your budget and pare down expenses. Consider giving fewer gifts or less expensive ways of entertaining. Last year’s decorations are also probably just fine.

Once you’ve balanced your budget, revisit it frequently over the holidays to make sure you’re sticking to it. You might find that you overestimated in some categories and underestimated in others.

For more advice on saving money over the holidays, visit www.bbb.org

Related articles

• Worst Holiday Money Mistakes (blogs.forbes.com)
• Holiday spending by the numbers (money.blogs.time.com)

Dinner is Done! ShopSmart Highlights New Shortcuts to Make Holiday Cooking a Snap

Timing a meal can be just as important as what you serve—but when you’re juggling hors d’oeuvres, turkey, veggies, casseroles, dinner rolls, and a dessert or three, it’s easy to fall behind. A new guide in the November 2010 issue of ShopSmart, from the publisher of Consumer Reports, reveals timesaving tools that really work and can save you some money. 

“It’s a good thing that holiday meals aren’t like a ‘Top Chef’ TV cooking challenge—no one’s going to kick you out of the kitchen if you cheat a little and use a few shortcuts,” said Lisa Lee Freeman, editor-in-chief of ShopSmart. “ShopSmart has uncovered tips to save time, including exactly what dishes you can make in advance and which foods to stock up on to shave cooking time and save money, which we hope will help our readers enjoy the holiday season instead of spending it all in the kitchen.”

ShopSmart’s “Best Cooking Time-Savers” feature covers 14 tricks to shop and cook smarter, top timesaving tools, a handy holiday-meal countdown to organize cooking schedules, and professional chef-approved shortcuts (pre-chopped nuts are a no-no!). Below is a sampling of some of ShopSmart’s advice.

New Ways to Save Time and Money on Big Holiday Dinners:
          An Easy Meal Planner to Prevent Cooking Burnout

2 WEEKS BEFORE

·         Money Saver! Write down your menu and read recipes carefully: Prepare a shopping list. Making a list ahead of time will save you from spending wastefully on ingredients you don’t need, or purchasing too little and needing to run out again.

·         Money Saver! Bargain hunt or borrow: Don’t waste money purchasing an item you can borrow but if you need to, planning ahead will help you bargain hunt. Keep an eye out for deals at supermarkets and cooking-supply stores.

1 WEEK BEFORE   

·         Cook ahead: Soup can be made up to a week ahead and frozen if you follow a few guidelines. Add pasta, rice, and other grains just before serving to avoid sogginess. Don’t stir in milk or cream until dinnertime: if you freeze, they’ll separate and curdle.

·         Money Saver! Get prepping: Toast your own croutons for stuffing and salads instead of spending on them in the store. When they’ve cooled completely, freeze in an airtight plastic bag until ready to use. Firm cheeses like cheddar and Parmesan also freeze nicely, so grate them now and save time later.

3 DAYS BEFORE

·         Money Saver! Shop for perishables, like fresh produce and dairy products: Trying to make room for incoming groceries may tempt you to throw out space hogs like bottles of juice, soda, beer and wine—but you shouldn’t have to buy them again. Put beverages in a cooler to save them for later use.  

·         Start brining your bird: If you bought a fresh turkey or ham, submerge the meat in a brine solution and refrigerate for 24 hours. Drain, pat dry, and return the turkey to the fridge until roasting time.

1 DAY BEFORE

·         Boil the potatoes: Dice potatoes speed cooking time; when they’re cooked, keep them covered in cold water to prevent discoloration.

·         Get organized: Prepare cocktail garnishes. Squeeze lemon juice, peel garlic, and wash herbs. Organize and label serving dishes; transfer them to a tagging area for easy plating at mealtime.  

THE BIG DAY

·         Bake fresh: For prime freshness, bake biscuits, rolls, and par-baked bread today; their textures can change even overnight.

·         Roast veggies: Roasted vegetables like brussels sprouts, potatoes, and parsnips lose their crispness once they’re refrigerated. Cook them today.

About ShopSmart magazine:

Launched in Fall 2006 by Consumers Union, publisher of Consumer Reports, ShopSmart draws upon Consumer Reports’ celebrated tradition of accepting no advertisements and providing unbiased product reviews. The magazine features product reviews, shopping tips on how to get the most out of products and “best of the best” lists. ShopSmart is ideal for busy shoppers who place a premium on time. ShopSmart has a newsstand price of $4.99 and is available nationwide at major retailers including Barnes & Noble, Wal-Mart, Borders, Kroger, Safeway and Publix. ShopSmart is available by subscription at www.ShopSmartmag.org.

Related articles

• The 10 Best Time-Saving Home Appliances (blogs.forbes.com)
• Food Photography: The Elements of Styling (dinersjournal.blogs.nytimes.com)