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Avoid overspending during the holidays

Buying gifts for loved ones and traveling to see family can be expensive. As the holidays draw near, there are many simple spending habits that can help you conserve cash and cut down on overspending, according to the Maryland Association of CPAs. That way, you won’t have to use credit cards for your holiday purchases and rack up expensive interest charges.

Make a plan

To ensure you can afford your holiday wish list, begin planning now. Start by making a list of the gifts you’d like to buy, the traveling you’re likely to do and other expected expenses. For each one, come up with a realistic estimate of its cost.

Now, consider how much spare cash you’re likely to have for these purchases. If you don’t have a written budget, list your regular expenses, such as rent or mortgage, utilities, groceries and commuting costs. Total up your take-home pay as well as any other money you expect to receive or savings you might have set aside for holiday expenditures. Deduct your regular expenses from the total to find out how much you have left to spend on the holidays.

Look for savings opportunities

If the amount you have to spend won’t cover your wish list, start seeking places to trim costs. Options include:

• Junk the java. If you’re spending several dollars a day on pricey lattes, you’ll be amazed at how much you save by bringing your coffee to work in a thermos.
• Make a grocery shopping list and stick to it. If you plan and shop for a week’s worth of meals in advance, you won’t give in to the temptation to bring home a high-priced takeout meal.
• Choose eating in over eating out. Remember that taking out is usually less expensive than dining in a restaurant. You’ll probably eat fewer courses and eliminate paying a tip.
• Bring a calculator with you when you shop. This helps you keep track of your total and discourages impulse purchases of more expensive items.
• Brown bag it. Bringing your lunch from home will lower your daily outlays significantly.
• Use your library card. Check out books and movies from the library for free.
• Carpool. Travel with a co-worker to save on gas and parking costs. If that’s not an option, find out if public transportation would be a cheaper choice.
• Leave your credit card at home. If you keep it in your wallet at all times, it’s available for purchases made on a whim. Carry it only when you know you’ll need it.
• Limit the cash you carry. The less you have, the less you will be able to spend.
• If you usually spend a lot of money at salons before holiday parties, let a trainee cut your hair or give you that manicure. Many hair salons or beauty schools offer services given by trainees at lower rates.
• Plan simpler parties. You can entertain while on a budget during the holidays by using your creativity. Throw a theme party and ask everyone to bring a dish from a different ethnic group, for example. 

Let your CPA help

There are many simple ways to cut back on daily costs and reduce your long-term expenses as well. Ask your CPA for advice on the steps necessary to make a real difference in your financial life, now and throughout the year.

For more smart spending tips, check out www.feedthepig.org, a Web site created by CPAs to help you build a solid financial future.

And remember, only CPAs are equipped to address your full range of financial needs with integrity and insight. In Maryland, CPAs must pass a rigorous two-day examination, adhere to strict ethical and professional standards, and, beyond college, complete 80 hours of continuing education every two years to be certified by the state — accountants do not.

Your doctor is certified; your lawyer is certified. Make sure your accountant is a certified public accountant.

For CPA referrals in your area, contact the MACPA at (410) 296-6250 or click here.

The Maryland Association of Certified Public Accountants (MACPA) is a statewide professional association that provides leadership, information and services for its nearly 10,000 CPA members, who are employed in private practice, industry, government and education. CPAs are business and financial professionals who have passed a rigorous two-day examination in order to be licensed by the state. CPAs are committed to protecting the public interest, and must adhere to stringent ethical and professional standards and continuing professional education requirements.