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3 expert tips to keep your holiday spending in check

3 expert tips to keep your holiday spending in check
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Each January, like clockwork, consumers across the nation collectively groan as the dreaded post-holiday money hangover sets in. But you don’t have to join them — according to personal finance experts Liz Weston and Clark Howard, as long as you organize early, spend strategically and have a debt repayment plan in place from the start.

Read more: 16 ways the dollar store can save you big bucks this holiday season

3 expert tips to keep your holiday spending in check

1. Make a spending spreadsheet

When you start to list all the gifts, travel, parties, decorations, donations and food you’ll be springing for, your holiday costs add up quickly. That’s why, at the start of every holiday season, Weston employs a proven organization method — a spreadsheet. Organizing your expenses in a spreadsheet can help you see exactly what costs you can cut before the holiday season even begins.

“The spreadsheet allows me to easily subtotal each category and then add everything together, and the result is usually breathtaking,” Weston says. “So I go back and trim here and there until I get a number that doesn't make me lightheaded.”

2. Don’t shop without keeping a list handy

When you’re on a gift-purchasing mission, arming yourself with a well-planned list can make all the difference. Howard says his method “is analog,” but it works. The first step is easy. “You take a sheet of paper and you write everybody’s name on it who you’re going to buy gifts for,” Howard says. Next, you figure out how much you can afford to spend and divide that budget among everyone on your list.

“You carry that list with you, and then as you buy a gift for somebody, if it’s more or less the same as what you had on your budget, you record that,” he says. If you spend more on one person, remember to subtract allocated money from the column of another person on your list — and the reverse is true if you spend less on a recipient, too. “The whole idea is to stay within a set, fixed budget,” Howard says.

If you aren’t expecting anything from Santa this year, don’t forget to add yourself to your shopping budget list. “When you’re out shopping for others, you’ll shop for yourself,” Howard says.

But, cautions Howard, resist the temptation to spend too much on yourself. If you’re someone who struggles to pass up a sale, then take only the amount of cash you budgeted for, and leave the cards at home. It’s harder to fork over bills than it is to just swipe your card.

3. Plan how you’ll pay off your debt

If you already have debt or (oops!) take on some debt this holiday season, you need a plan to pay it off. There are two options that might make sense for your situation: a 0% balance-transfer credit card or a personal loan.

With a 0% balance-transfer credit card, you can transfer your high-interest credit card debt to a card with a lower interest rate, typically 0% for an introductory period — as long as 21 months, depending on the card. There’s typically a balance-transfer fee involved, determined by a percentage of the total amount you need to transfer.

Howard suggests a 0% balance-transfer card without a high upfront fee because it gives you a set repayment deadline to stick to. “Let’s say you’ve got 12 months at 0% interest; then your goal needs to be in 12 months that you pay off that balance because it gives you a finite amount of time and a specific target you have to meet,” he says.

Transferring your debt to a 0% card offer is only a good idea if you’re using that low rate to help you pay off debt faster, Weston says. “It shouldn’t be an excuse to postpone dealing with your debt,” she adds. “If you don’t have the discipline to pay off the card before the teaser rate expires, then a personal loan may be a better option.”

Personal loans typically come with fixed interest rates and set payment amounts that force you to pay the debt off over time. Howard says it’s possible to get a lower interest rate by using a personal loan to pay off credit card debt. Be aware, though, that your interest rate will typically depend on your creditworthiness and other factors lenders might consider, such as job history or earnings potential.

Weston and Howard advise you to resist the urge to run up more purchases on your credit cards while you’re paying off your debt. “Many people who successfully pay off debt make their credit cards physically difficult to use, either by freezing them or storing them somewhere they're a hassle to retrieve,” Weston says.

As you form a plan to pay off your debt, Howard suggests setting a maximum time limit of three years. Most people pay only the minimum on their credit card bills when they can actually afford to pay more. Take a look at your card’s statement, and instead of looking at the minimum, pay attention to the box that shows how much you need to pay each month to get the debt wiped out in 36 months. With a short time period, your progress is tangible, which gives you even more motivation.

Otherwise, Howard says, people typically lose focus when an end goal is longer than three years.

There’s no need to wait until the new year to make a financial resolution. The holiday shopping season is the perfect time to engage in a little self-control, at least when it comes to your spending.

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Anna Helhoski is a staff writer at NerdWallet, a personal finance website. Email: [email protected]. Twitter: @AnnaHelhoski