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Survive holiday season without going broke

The Airman and Family Readiness Center can help servicemembers financially prepare for the holidays. To avoid going over budget and becoming overwhelmed by debt, contact the AFRC at 229-257-3333 for an individual financial assessment. (U.S. Air Force illustration by Senior Airman Sandra Marrero/Released)

The Airman and Family Readiness Center can help servicemembers financially prepare for the holidays. To avoid going over budget and becoming overwhelmed by debt, contact the AFRC at 229-257-3333 for an individual financial assessment. (U.S. Air Force illustration by Senior Airman Sandra Marrero/Released)

Moody Air Force Base, Ga. -- The holiday season is approaching, and it seems like everywhere you look, there's an enticing reason to spend money. Television ads, stores packed with holiday items, email and cell phone alerts all serve as a reminder to dip into our bank accounts or reach for a credit card to make those last-minute purchases.

But with budgeting, proper planning and some creativity, it is possible to get through the holidays without going broke. 

"I think the biggest mistake people make is not budgeting for the holidays, said Sheena Parrish, Airmen and Family Readiness Center community readiness specialist and accredited financial counselor.  "On Dec. 26 of last year you knew the holidays were coming this year."
 
One of the biggest decisions to make beforehand is how much to set aside for holiday spending.

"I think deciding on a budget is the first step and experts recommend not to spend more than 1.5 percent of your take-home income," said Parrish. "Some of us need that because it's very easy to get carried away."

Now who to spend that 1.5 percent on? There's immediate family, the neighbors, the babysitter, the dog walker - the list can go on and on, but Parrish points out it's best to keep the list short.

Can you remember every gift you bought and received last year or do the memories of spending time with loved ones stick out?  There are ways to let the people in your life know you're thinking of them and appreciate them without breaking the bank.

"I think our deployed servicemembers can relate to that," said Parrish. "When they are deployed over the holiday season, what are they missing? Are they wishing they could be joining in on getting all these gifts? [No], they're missing the time spent. It doesn't really come back to the gift."

Volunteering with others, preparing a meal or contributing to a loved one's charity of choice are inexpensive ways to create memories. Giving homemade gifts like candles, soaps and baked goods are other options to stay within budget this season. 

For those buying presents, taking time out to plan purchases can help reduce costs. The further ahead a person plans, the more time he or she will have to look for sales and military discounts, compare prices, and avoid impulse buys.

Furthermore, thinking ahead can keep shoppers from relying on credit cards to manage expenses.  Using a credit card might be a tempting option, but oftentimes consumers are still paying off the previous year's debt during the holiday season.
According to a Consumer Reports survey, 13.6 million Americans were still paying off holiday purchases from 2009 in November 2010.

With high interest rates on in-store credit cards and possible fees and penalties that can accumulate, Parrish recommends using cash instead of credit to help curb spending.

"When we spend with cash there's more of an association with what you're actually spending, said Parrish. "With swiping a credit card there's really a minimal connection with your money and how much you're spending. Some people are blown away when those statements show up and they can't believe how much they've spent in a certain period of time."

Financial strain can create stress and take away from the fun of the holidays.  By taking some time out to come up with a plan of action, servicemembers and their families can focus on what's most important to them and save money.