Protect your finances with these holiday shopping tips

As we head into the final months of 2011, you may be wondering where this year went. If you set financial resolutions in January for 2011, did you meet them? If you did, congratulations! If not, don't despair. With some advanced planning and a little commitment, the holiday shopping season can provide an opportunity to make up some lost financial ground.

Retailers are already setting up holiday displays, and some are even holding holiday sales to get an early start on their busiest shopping season of the year. Take their lead and begin planning now for your holiday shopping. Regardless of the holidays you celebrate, having a spending plan can go a long way toward helping you avoid holiday blues that can result from credit card debt and lingering bills.

Have a Plan

Just as not having directions for a road trip to an unfamiliar location can cause anxiety, not having a plan for your holiday shopping can lead to financial stress. When heading to the mall or logging onto your laptop to shop online, be sure to:

• Define your holiday spending budget
• Know who you are buying for, along with the maximum amount you wish to spend on each person. Better yet, consider giving gifts that don't cost anything - plan to spend time with loved ones or friends. The memories you create and share will likely be more meaningful than a material gift.
• Search for coupons or special offers before purchasing items. With projections for retail sales expected to be lower than last year, there will likely be plenty of deals and bargains from which to choose.
• Know exactly how you will pay for these purchases - tapping the holiday savings fund you may have started many months ago, paying cash, using credit cards, etc.

Keep a checklist with you as you shop, as well as the amount you plan to spend for each person on your list. This will go a long way toward helping you avoid impulse purchases that are common during the holiday season.

Stick to your Plan

While you may find a perfect gift for someone not on your list, it's important to resist the impulse and stick to your game plan.

• Remember your financial goals if you find yourself tempted to buy more an expensive gift that exceeds your budget
• Be wary of opening up new credit accounts simply for additional discounts. If the deal is too good to pass up and you decide to apply for the card, be aware that this may impact your credit score

Safe Shopping Tips

Having a wallet or purse lost or stolen can put a damper on your holiday season. In addition to losing cash, there is the time it takes to contact the companies whose cards you need to close, as well as the possible damage to your credit report that you'll need to fix if someone commits identity fraud against you.

Keep the following in mind as you head to the mall this year:

• Bring with you only the cards or cash you'll need for that day's trip; if you lose your purse or wallet or if it's stolen, it will make clearing up the situation that much easier
• Keep your purse or wallet under wraps; avoid tempting would-be thieves by leaving these items exposed. Keep gifts you've already purchased hidden and locked in your car trunk -- out of sight, out of mind for would-be thieves

Protecting Your Finances into 2012

Plan on having a solid grasp on your finances as 2012 approaches by knowing exactly how much you spent on gifts this season, and more importantly, how you will pay for those gifts.

• Aim to pay off any holiday shopping credit or store card balances by March of 2012, if not sooner. If you extend the time to pay off these purchases, you're essentially paying more than the gift costs due to the extra interest charges on your credit card.
• Plan for the 2012 holiday season! Create your own mini-budget around next year's holiday season and set aside a little bit each month. When the 2012 holiday shopping comes around, you'll be well prepared to pay for those purchases!

The holiday season can be a special time of the year - proactively managing your finances during this time can help you focus on what matters the most.