NEW YORK — There's a little more than seven weeks before the December holidays, and you haven't saved a penny for gifts or entertaining.
If racking up more debt with your credit cards doesn't sound like much of a way to celebrate, the solution may be an austerity plan. For instance, if you slash $65 a week from your regular spending, you could have $500 to spend on the holidays.
Money-management experts say such drastic measures are not the best way to plan for the holidays.
“Do you want to go through the process of self-deprivation in order to make this work?” asked Bruce McClary, a financial educator for Clearpoint Credit Counseling Solutions.
Experience working with people seeking credit counseling shows it's typically not that hard to find $65 or so of weekly fat in someone's budget. But efforts to trim it do require a behavioral, even a lifestyle change.
It won't be easy. But it can work. Here are some tips:
♦Assess the situation: Do you prepare a monthly budget? The first step in any cost-control effort must be keeping track of spending. Using online banking or a free money-management service, you can get a breakdown of how much you spend in different categories, which will give you a good idea of where to start looking for savings.
Budgeting counselors also advise their clients to keep track of each purchase, particularly in the early stages.
The FDIC found that 5 percent of consumer accounts pay 20 or more overdraft fees each year. If keeping track of your account saves you just two overdraft fees at $30 each, you'll save $60.
How about other fees? If you frequently use ATMs at banks other than your own, you could be spending an enormous amount on surcharges. At $4 a transaction, if you cut out just two visits to ATMs away from your bank each week, you'll save the same $60.
♦Scour those statements: Do you often pay your bills late? Not only is that damaging your credit score, it's also costing you a fortune — up to $39 for a credit card, for instance.
Also, make sure you're not paying unneeded services, like premium cable channels you rarely watch. Research firm Centris estimates the average monthly cable bill is $71. Cutting one or two premium channels or stepping down a service tier can save at least $15 per month. You may save another $20 by combining Internet and cable or phone service.
♦Easy on the entertainment: Are you a movie buff? If you see one movie each week for $10 and spend $6 at the snack counter, just cutting back to every other week until the holidays are over can put $64 in your piggy bank.
Like to go out to dinner on weekends? Let's say you typically spend $30 on a restaurant dinner. Persuade your friends to pitch in for a potluck just one week instead and pocket that cash.
♦Think before you drink: There's the morning latte on the way to work, the vending machine soda to fight off the afternoon doldrums and the bottle of water at the gym. Individually, they may seem inexpensive, but they can add up. If you're spending $5 each workday on beverages, and you substitute low-cost (coffee made at home) or free (tap water) alternatives just half the time, you could save $82.50.
♦Be a frugal foodie: The federal government estimates the average adult spends $55 a week on food eaten at home. One of the easiest and most effective ways to pare this figure is simply by shopping with a list. You can cut even further if you “shop your pantry,” and use what you've already bought in the next few weeks.
So before heading to the store, check your cupboards and freezer, and plan out meals using up what you have. Then stick to your list.
