11 surefire ways to waste money during the holidays

Best Ways To Keep Your Holiday Spending In Check
Best Ways To Keep Your Holiday Spending In Check

Retailers use "can't miss" sales, dazzling displays, sweet holiday scents and music to entice people to spend more money during the holiday season than at any other time of year. And it works. Holiday sales are expected to reach $630.5 billion in 2015, a 3.7 percent increase over last year, according to the National Retail Federation. The NRF also predicts that shoppers will spend an average of $805 per person.

If you've taken steps to save money and stay frugal during the holidays, you still might be habitually wasting money without knowing it. Here are 11 ways you're overspending and how to stop.

1. Hosting a holiday feast.

Christmas usually becomes Thanksgiving Part II, with a banquet-sized dinner big enough to feed a family 10 times the size of your own. The hundreds of dollars spent at the grocery store, plus preparation and cooking time – and that Pinterest-inspired table decor – isn't always worth the effort for a grand meal.

Save yourself some money and energy by turning your dinner gathering into a potluck instead. Invite relatives and guests to bring their favorite dishes so the cost of your holiday meal is spread out evenly over everyone who comes to the table. Bonus: You won't have to loan out your containers for leftovers either, because everyone will have brought their own.

2. Shopping without a strategy.

Having a clear-cut budget for gifts is a great start, but it can quickly go to waste if you don't have a shopping plan in place. Saunter through your local mall, and you'll likely have a hard time resisting the temptation to buy impulsively for your kids, spouse or yourself. Indulge, and you might be paying more than if you compared prices online or in other stores beforehand.

You might even be shopping at the wrong time. If you buy because you happened to wander into a certain store, you could be paying full price for a boatload of toys that will go on sale the next day. Your best course of action is to outline a budget and shopping wish list, compare prices, look for discounts or coupons, and adjust your shopping list to fit within your budget. That way, you'll have your finances set, and you'll have a strategy to get exactly what you need at the right time.

3. Putting everything on a credit card.

It's possible to stay within your budget yet overspend at the same time if you exclusively use your credit cards for your Black Friday-to-Christmas Eve shopping. If you don't pay off your balance on time, the penalty interest you'll be hit with will cancel out all your efforts to save money during the Yuletide season.

Rely too much on your plastic, and it'll show up on your credit report, too. Your credit score might even take a hit if your debt-to-credit ratio is too high. Like reminding yourself not to drink too much egg nog this year, use credit in moderation. Opt instead for your debit card or cash if you need help staying disciplined.

4. Going overboard with Christmas lights.

Don't try to compete with those houses with the massive light displays set to music that you've seen in viral videos. Lights covering every inch of your house isn't exactly a bright idea from a financial standpoint. It can cause your utilities bill to skyrocket for the month of December.

Try going easy on the lights and opt instead for simple, colorful decorations that can be seen during the daytime and at dusk, such as ribbons, tinsel or an inflatable seasonal character. Combine them with fewer lights for a tasteful, yet affordable, effect. Remember, Santa doesn't need lights on the ground to guide his sleigh; that's what Rudolph's nose is for.

5. Buying gift cards at full price.

Gift cards are the perfect present for the person who is hard to shop for because it gives them the freedom to get what they want. They also give you the freedom to choose the exact amount you want to spend.

That doesn't mean you should spend $100 for a $100 card, however. Check out gift card exchange websites, such as Gift Card Granny, Cardpool or CardKangaroo, where you can find fully loaded and partially spent gift cards at sharply reduced prices. Shop smart: Pick up a few gift cards for the price you initially would have spent on one at a retail store.

6. Sending too many greeting cards.

It's always nice to get a heartfelt card in the mail from a friend or relative, and sending cards to loved ones can really get you in the holiday spirit. That sentiment can diminish, however, when you get cards returned because of a wrong address or when you realize you spent extra cash on fancy cards and postage for people who don't keep in touch with you.

Whittle down your list of card recipients to a handful of close loved ones. If your circle is still too large, send your closest relatives and best friends the physical greeting cards and send your distant relatives and larger circle of friends free e-cards or thoughtful messages on Facebook.

7. Buying overpriced wrapping paper.

You know you've got a problem when the wrapping paper you've bought ends up costing more than the gifts you're wrapping. Boutiques and gift shops can be great places to pick up trinkets for friends and family, but you should pass on the expensive paper sold there. Just like that holiday meal that gets devoured in minutes, wrapping paper is torn through in seconds and then thrown away.

Adorned with a nice bow or ribbon, wrapping paper from a discount store like Dollar Tree is often just as pretty as more expensive paper. Or, you can make your own wrapping paper using old newspapers, brown paper bags or even pages from old books or maps that you can find in bargain bins.

8. Paying full price for a rental car.

If you're renting a car for your holiday road trip, don't pay full price. Book your rental online ahead of time to get the best deal. Once you go to the location to get your car, you might be able to negotiate a great deal on a larger vehicle if the agent is trying to move certain cars off the lot. If you walk in without a reservation, you could get gouged.

Oh, and get the insurance. Most car insurance policies have a $500 deductible. If you get into a fender bender in your rental, you'll have to fork over the deductible. It's a lot cheaper to just pay about $10 per day for the rental company's basic damage waiver insurance – not the full protection package – so that you have peace of mind during your holiday vacation.

9. Being too charitable.

Donating money to a favorite charity, nonprofit or local cause during the holidays can be a great way to help others and balance out a creeping sense of materialism during your holiday shopping spree. But a few dollars here and there to every Santa ringing a bell next to a donation box can drain you of the cash you budgeted for other needs.

Aim to be more selective in the organizations you give to. Set up a budget for specific donations or for tithing on a year-end bonus and stick to it. The same goes for gratuities: If your standard is 18 percent, and you want to do more for the holidays, be realistic about your budget. Opt for 20 percent or 25 percent if 30 percent will make you broke.

10. Overspending on shipping.

When it comes to gift shopping, you can usually get better deals and selections if you buy sooner than later. If you're purchasing some gifts online, however, you might pay too much in shipping if you shop too soon.

Free Shipping Day, when many retailers offer free shipping on holiday purchases, is Dec. 18. As part of your budgeting and shopping strategy, plan ahead to take advantage of free shipping offers. If you're traveling to visit family for the holidays, save yourself the trouble of carting all your packages with you by shipping gifts directly to where you're spending the holidays together.

11. Splurging on yourself.

More than half of all shoppers surveyed by the National Retail Federation plan to splurge on an item for themselves while they're out shopping for others. Dipping into your gift budget to indulge can throw off your spending plan or even cause you to rely on credit cards to finish up your shopping.

Use common sense when hitting the malls if you spot something that catches your eye. If it'll make shopping for your friends and family too financially challenging, pass on it. That present for yourself might hit the discount rack after the holidays are over.

Not only is this the time of year to put your gift recipients first, but you never know what they might get you for the holidays. You might just find the same gift you bought yourself with your name on it under the tree this year.

Copyright 2015 U.S. News & World Report

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