Peggy Olive, UW-Extension Financial Capability Specialist
Department of Consumer Science
UW-Madison School of Human Ecology
More tips about staying within your holiday budget can be found here.
Lorre Kolb: Managing your holiday spending budget. We’re talking today with Peggy Olive, UW-Extension financial capabilities specialist at UW-Madison and I’m Lorre Kolb. Peggy, we’re going into that time of year when people can fall into pitfalls with their financial planning and spending.
Peggy Olive: Yes, and you’re absolutely right, we’re heading into the holiday season that involves a lot of holidays that revolve around gift-giving and family gatherings and other things that can be large expenses on the budget. And for some people they’ve planned year-round for this time of year, which is wonderful, kudos to them; maybe they saved money or picked up gifts on sale and then there’s the rest of us.
Lorre Kolb: What should people think about as they’re considering how to budget for holiday gifts?
Peggy Olive: Start with a budget and then you’ll know how much money you can use for your holiday gifts or activities or travel. So even knowing how much money you have to start with is the place. If you have money in the bank, wonderful and if you don’t have money in the bank then the other options are you either need to come up with that money out of your current paycheck or you’re going to have to borrow that money and it’s going to come out of future paychecks. So if that money is coming out of your current paycheck you’re going to have to look for other places you can cut back, just temporarily to free up a little bit of money for the holidays and if you’re planning on putting that money on a credit card or take it out of your future paychecks then you also have to have a plan to cut back in the future for when those credit card bills show up. When you do have your budget, just trying to make a wise use of the money you do have; looking or those sales, or using coupons, or thinking of those homemade gifts or activities or travel on the cheap; so trying to make your lifestyle fit within that amount of money.
Lorre Kolb: What should people do to prepare for holiday shopping?
Peggy Olive: People typically spend as much on themselves as they spend on others when they’re out shopping just because they’re surrounded by all these great deals and sales and they’re getting in the spirit, so I would even suggest to people to make your gift list before you hit the stores or get on the Internet, knowing how you might want to express your appreciation and your caring for people around you within your budget.
Lorre Kolb: What’s some advice that you can give people while they’re in the store?
Peggy Olive: Yes, in the store caught up in the holiday spirit, in the moment and it’s really hard at that point to stick to your budget, even though you know how much money you have or want to spend and even though you have your gift list, just trying to come to some terms with the limitations. It would be great to play Santa or gift-giver to the world, only we all have certain limitations. So think about what else you can offer in terms of your creativity, providing a service, or homemade gifts or taking an elderly neighbor or relative out to the store in terms of helping them doing some shopping or decorate.
Lorre Kolb: We’ve been talking today with Peggy Olive, UW-Extension financial capabilities specialist at UW-Madison and I’m Lorre Kolb.