Here are the raw stats:

Every business reports your financial management activities to the three major credit bureaus—Experian, TransUnion, Equifax. Your financial activities dictate your FICO (Fair Isaac Corporation) score, ranging from 300 (worst) to 850 (best), and this is what lenders, landlords and employers use to determine your credit risk. The lower the score the more likely you’ll be considered a risk. It also dictates interest rates. A low score can mean thousands more in interest payments, as you can see in this table:

Here’s how FICO scores affect rates based on a 3-year auto loan for $15,000.*

*from myfico.com

Your credit history can haunt you for the rest of your life so it’s a good idea to follow this easy three-step-plan to build, maintain and (if you must) repair your credit.

#1 Build Your Credit

Open Checking/Savings Accounts: You can open an account for as little as $10 at some banks. The ability to maintain your accounts will show lenders that you can reliably handle money. Opening an account is particularly beneficial for those who haven’t already established credit. Bounced checks mess up your credit report, so use that check-writing feature wisely!

Apply for a credit card: Part of your debt planning should include determining what type of credit cards you should sign up for. Get a credit card with low interest rates (not just intro rates), no annual fees, and a generous grace period. Try not to carry a balance so you don’t end up paying interest. Retailer cards are easy to get but have high interest and worse penalties, so only get one if you’re able to pay in full each month. Secured cards require a deposit, which becomes your limit. Be careful about missed payments as they come out of that deposit. Be aware that secured cards also have high interest rates.

Don’t get lots of credit at once: When you get credit, it goes on your report so if you open many accounts at once, they drag down scores and worry lenders. Even applications stay on your report for two years. If you need more than one card, wait six months before opening another. Wise financial management practices dictate that you use your first card responsibly, especially during the first six months; doing so will allow you to get better rates on future cards.

Piggyback on someone’s credit: If family members with established credit add you to their credit cards, your credit will reflect upon theirs. Conversely, so-so or bad credit from your family members may be something you’ll inherit as well, if you sign on as additional members and users of their credit cards.   Also, if they co-sign a loan with you and you default, you’ll be impacting their credit, so be careful. 

#2 Maintain Your Credit

Get Your Credit Report: Use annualcreditreport.com to get all three reports once a year for free. If you find mistakes, immediately contact the credit agencies since discrepancies stay until you take care of them. If your report is bad due to debt, start working on repairing your report. Avoid companies that offer to fix your credit:  many are reputed to be rip-offs and have been reported to use illegal practices. The only way to improve credit is to pay debts and dispute false charges.

Mint Tip: If there are unauthorized charges and you suspect identity theft, immediately visit the Federal Trade Commission Identity Theft Site.

Get Your Credit Score: Although you can receive credit reports for free, it’s not typically the case with credit scores. Credit scores cost $15.95 at annualcreditreport.com or myfico.com. Cheaper sites calculate their own scores, and are often inaccurate. Just like credit reports, you have three scores. Check all of them if you’re making a major purchase. You don’t want to get caught off guard if the lender checks one that you weren’t able to review beforehand.  Recently, a new service called CreditKarma.com was launched to provide free credit scores to the public. The downside?  You’ll have to supply your personal information to this new company before you’re able to review your scores.

Don’t close old accounts: Once you’ve paid off your credit card accounts, don’t close them off!  Older accounts will show that you have long-lasting credit history, and this will indicate that you have financial stability. If you close your available credit, it’ll raise your debt-to-credit ratio. 

#3 Repair Your Credit

Pay in full every month: If you carry a balance, you’ll pay interest. If you’re unable to pay in full, pay at least the minimum on all debts. Paying at least the minimum will improve your credit history and score, which will give you leverage for lowering your interest rates.

Pay on time: Late payments mess up your report for years. It can also raise interest rates. Any late payments you make on any one bill will affect the interest rates you have across all your credit accounts. If you have trouble remembering due dates, have Mint remind you when bills are due and set up auto-bill pay online through your bank.

Lower your debt-to-credit ratio: Your debt-to-credit-ratio is what you owe versus how much credit you have. If you owe $5,000 and have $10,000 in credit, your ratio is 50%. The lower the ratio, the better. Aim for a ratio that’s less than 30%. A quick way to lower it is to increase your credit line; but, don’t spend more just because you happen to acquire more credit.

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Career Planning

During these tough economic times, you may find that the only work you can land is temporary, but don’t despair: Suze Orman worked as a waitress for 7 years before becoming a renowned financial management guru.

Mint Tip: For great web sites to aid you on your job search, you can visit Craigslist, Indeed.com, Simplyhired, or Yahoo!HotJobs.  And continue to tap your school’s career center for potential employment leads.

Moving and Housing

If you do move, get your friends and family’s help to keep moving costs down.  And you’ll likely want to find a roommate to keep your monthly rental costs down, too.  You can connect with potential roommates through online sites such as Craigslist, roommatelocator.com, roommates.com, metroroommates.com, roompals.com, and roomster.net, just to name a few.

Food

Restaurant food costs more than home cooking.  To help you plan your healthy and cheap meals at home, you can check out Amazon.com for a few highly rated cookbooks and recipe books like “Cheap and Easy Cooking; Cheap, Fast & Easy Cookbook” and “Cheap.Fast.Good!”   Join your local CostCo or Sam’s Club, use coupons at local grocery stores, plan out your meals carefully and be creative with your leftovers.  This is one area of your personal budget where spending some time can save you significant money.

Transportation

Avoid buying a car unless it becomes absolutely necessary, as monthly car payments, insurance and maintenance costs can weigh heavily on a tight budget. Public transportation is not only good for your bottom line, it’s also great for the environment.  Or use a car sharing program such as Zipcar.com, which allows you to rent a vehicle on an hourly or daily basis. Finally, if it turns out that you’ll really need to own and drive a car, then buy used. New cars depreciate rapidly and many people end up owing more on their car than it’s worth.  Check out our car buying advice in:  Young Professional’s Car Buying Guide. Have you faced some financial challenges we haven’t covered here? Anyone find other sites or tips helpful in making ends meet as a new grad? Share here…readers (and Mint employees not that long out of school ourselves) will thank you! Related Mint Tips: Personal Financial Planning Online Financial Planner Online Personal Financial Tracking Personal Financial Advisors

Focus on reducing your debt.
With a steady income, you can now handle some of your financial management issues with confidence, and you can start tackling any debt you have head on. Always pay your bills on time and, if possible, pay more than the minimum — you’ll reduce your debt faster this way. If you’re committed to paying the balance in full each month, you should look into using reward cards for their benefits. It’s also important that you control your spending so that you avoid racking up additional debt. Some great ways to avoid overspending? Wait 24 hours before making any decisions that involve major purchases. Compare your typical monthly expenses over time, or versus your neighbors using online tools like those offered by Mint.com.

Establish a 401K or IRA.
Retirement seems far away, but the more you save now, the more you’ll have when you retire. If you’ve got a healthy savings habit, the power of compound interest will ensure that you also get a healthy retirement. Some retirement financial management advice to consider:

• if your 401K has an employer match, contribute the maximum pre-tax amount
• And invest enough to your 401K to get the full match.
• if you don’t have an employer-sponsored retirement plan, or if you’ve got the extra money after maxing out your 401K, set up a traditional or Roth IRA. Find out which type of IRA you’re eligible for here.

Get sufficient health care coverage.
If your employer doesn’t offer coverage, see if you can be covered under your spouse or significant other’s health insurance. If not, pick up your own health insurance. If you’re in a low income bracket, visit the Centers for Medicare and Medicaid (www.cms.hhs.gov) for information on programs that may help you, such as SCHIP (a program for children) and Medicaid (a program for individuals and families). For free and low-cost prescription programs, visit TheMedicineProgram.com (http://www.themedicineprogram.com/) and Partnership for Prescription Assistance (https://www.pparx.org/Intro.php).

Get the other coverage you’ll need.
At a minimum, you’ll need auto, renters’ or homeowners insurance, and disability insurance. But the good news is that most insurance companies will give you a discount if you have multiple policies with them. Also, don’t worry about life insurance for now unless you’ve got dependents.

Plan for long-term goals.
It’s never too early to set the stage for fulfilling your long-term goals. Here are a few ideas to help you keep your focus on the future:

• Visualize your goal: think about how fulfilling it would be to own a car or home, to embark on a trip around the world, to start a business or even to retire early! Then commit to making it happen.
• Plan your budget carefully and watch your spending. Look into using personal money management software such as Mint.com, which can make it much easier for you to manage your personal budget and find ways to save. Any savings you achieve should be applied to your long-term goals and plans.
• Commit to putting away a certain amount of your paycheck monthly.
• For longer-term goals, consider investing your money in the stock market.

Develop sound tax strategies.
The biggest chunk you’ll be paying out of your paycheck will be going to the tax man, so why not check out these tips to maximize your take home pay?

• By using the IRS’ withholding calculator, you’ll be able to determine the right number of tax deductions to claim. This will prevent you from overpaying or underpaying your taxes.
• Visit PaycheckCity.com to review their paycheck, 401K, 403 (b), and savings calculators. Figure out what it will take to pay just enough so you break even every year.
• If you have business-related expenses, save those receipts. You may be able to write them off during tax time.

By heeding these suggestions, you’ll be well on your way to successfully managing your finances. Keep in mind that tools like Mint can make your financial management tasks easier by providing you with simple budget tools and alerts. Do you have a new job and are you using Mint to track your spending? If so, we’d love to hear how Mint has helped you find and save money!

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Prepare for the Unexpected

Solid personal financial planning also requires that you review your insurance policies and estate plans for relevancy and accuracy. For complex situations, you may want to consult with your personal financial advisor or your lawyer.

Here are a few questions to think over:

1. Have your financial circumstances changed?
2. Are your life, disability, homeowners/renters, and car insurance policies still appropriate?
3. Do your will and/or trust still reflect your family situation? And your wishes?

Make tax preparation a productive use of time. With some simple document organization, you can have all the information you need to answer some key questions about your financial health … and make some smart decisions to improve it over the next year.

Mint Asks: Do you have any money management tips or tricks for organizing and cleaning up your personal finances during and after tax season?

So, how do you choose?

First, know yourself: if you typically carry a balance, rewards cards are likely not right for you—you’ll pay more in interest than the value of the rewards you’ll be able to redeem. Debt planning is the key here. Also, if you are late on a payment, some credit card companies forfeit rewards, raise your interest rates and/or eliminate interest rate grace periods. But, if you pay your credit card balances off in full every month and on time, then rewards cards have a lot to offer you.

Here are 3 Important Steps to Reaping those Rewards:

1. Pick a card that delivers rewards you’ll use… and can redeem.

1. Review where your money Actually goes, not where you think it may go. Chances are that a card that rewards your loyalty with free or discounted gas and groceries and restaurant dining will save you more money than one that give you plane tickets. And what about cold, hard cash?
2. Check redemption rules carefully Before applying for a rewards card of any type. Some cards limit how much you can earn; require you to spend a certain amount before rewards kick in; or offer a tiered rewards system. You’ll need to know which purchases qualify for rewards, and under what conditions those terms can change, to accurately estimate what you’ll be able to earn in a year.
3. Caveat: Be particularly wary of frequent flyer cards if you rarely fly, fly only during holiday “blackout periods”, or fly on short notice. Award seats are becoming an endangered species…especially as the airlines’ merge.

2. Once you’ve determined the category of rewards you want, shop and compare the cards currently offered.

1. All costs. Consider interest rates, annual fees, grace periods. Watch introductory rates. A card that’s set at 3% for 12 months is better than one that starts at 1.5% then pops to 5% after 6 months. Some cards also charge a fee to redeem rewards. Diner Club, for example, charges a 95 cent fee for each 2,000 points redeemed.
2. Any fringe Benefits which have true value. Some cards offer more than cash back, points or miles. They offer AAA discounts, roadside assistance, concierge services, rental car insurance, special hotel rates, etc.
3. Check rewards expiration dates. Some rewards expire if you don’t redeem them within a certain amount of time. Additionally, most frequent flier cards apply blackout dates, seat restrictions, and expiration dates on miles. A few critical restrictions can significantly reduce the value of the rewards you’re hoping to receive.

If all of the above sounds like too much work, you’re not alone. Mint.com was specifically designed to make understanding where you really spend your money, and which credit card is really right for you easy and automatic. Mint compares your personal spending patterns and payment history to the interest rates and rewards offered by hundreds of US credit card companies.

3. After you get your card, remain a savvy rewards consumer

1. Be Alert to policy changes. By law, credit card companies have to notify you if they change interest rates, but not if they change rewards policies. Open those envelopes and read the fine print. If policies change, call and fight back…or repeat steps 1 and 2, above!
2. Be resistant to the temptation to spend more. Some card companies notify you when you’re approaching a rewards threshold or when you’ve just earned or redeemed an award, tempting you to spend more money than you should. Don’t let yourself be led astray (from your budget).
3. Price Check the rewards offered. You may find that the products in the rewards catalogue are not worth what you spend to receive them. Compare one card’s requirement that you spend $2,000 to earn 2,000 points to get a free iron vs. spending $1,250 on groceries, drugstores and gas to earn 6,000 points in your first year with a Citi card which would get you a $50 gift certificate to Target. You could buy a $15 iron, and still have $35 more to spend!

If you’re not certain of your typical monthly spending or what your cards currently charge in interest rates and fees and their grace periods, visit Mint.com, the online financial planner to find out in 5 minutes or less. Our Ways to Save page will provide you unbiased recommendations and quantify your potential savings and/or rewards.

Mint asks: How did you find your last credit card? And did you make a good decision?

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Learning how to personal bills tracking is something that we care about here at Mint.
Learn more with great personal bills tracking tips in our blog article index.

To anyone who just completed “year end enrollment” in their employer’s health insurance plan, and anyone who’s paying for their own medical insurance, it’s clear that costs are only going up. According to the National Coalition on Health Care, Americans spend $6,700 per person annually on health care.

So it makes sense to try to cut costs wherever you can without putting your health at risk. Here are 10 ways to reduce your medical costs while keeping yourself healthy.

At the Doctor’s Office

1. Ask for generic drugs. Generic drugs are cheaper than name brands. Busy doctors forget about alternatives, so don’t hesitate to ask. Check out Blue Cross and Blue Shield’s list of top prescription drugs and their generic equivalents. For pain medicine, find out if there’s an over-the-counter instead.
2. Avoid unnecessary tests and visits. If you move or change doctors, take copies of test results with you. Always talk to your doctor first, but some follow-up visits and tests are unnecessary-like annual EKGs. Call instead.
3. Barter for services. You could trade plumbing, legal advice, or tax preparation, etc. in exchange for medical services. A hospital in Brooklyn has a program that barters for medical care. Craigslist also has ads offering bartered medical services.
4. Get free samples. Doctors, dentists, and optometrists get tons of samples from manufacturers hoping to increase brand awareness. Ask your doctor for some instead of paying for prescriptions.
5. Negotiate. Some hospitals waive or reduce certain fees. Others will reduce the bill in exchange for cash upfront. Be sure you ask for explanations of costs if you don’t understand them. You wouldn’t overpay for something at Target, so don’t do it at the doctor’s office.

At Home

1. Outsource common tests. Independent labs can screen for cancer, run drug tests, and analyze blood and urine. Some even offer secure online access to your medical information. Check out myMedLab, PrivateMD, and PrivateLabTesting.
2. Personal Bills Tracking You can deduct expenses if the itemized total is more than 7.5% of your adjusted gross income. This includes expenses from acupuncture, artificial teeth, hearing aids, eye surgery, psychiatric care, and even weight-loss programs. Read the IRS’s Publication 502 for more information on tax breaks and which medical expenses are deductible.

You can use Mint.com to easily for your personal bills tracking and medical expenses incurred at all your health care providers, pharmacies, online services, etc, across all the accounts you have added to Mint.com. Mint automatically categorizes some expenses as Medical, and you can recategorize and/or label transactions to get an full and accurate picture of your total spending and to see if you qualify for tax breaks.

Show Me How

3. Fill prescriptions online. This is the cheapest option for people who take drugs daily. Make sure any company you use is FDA approved, has a physical address, privacy policy, and a secure Web site. They should also be a fully-licensed pharmacy or should fulfill orders from a fully-licensed pharmacy. Check out FrugalMed, MedBasket, and DrugsPark.

In the Future

1. Review your insurance plan. Meet with a professional if necessary. Don’t focus solely on the monthly premium-consider the total cost, including out-of-pocket expenses. If you can afford a higher deductible, lowering premiums will offer immediate savings. A younger person in good health might consider switching to a Health Savings Account (HSA). HSAs allow you to pay for current health expenses while saving for future medical expenses, tax-free.
2. Live a healthier lifestyle. Ok, we had to say it. Fulfill your new year’s resolutions to exercise more, eliminate stress, stop smoking, get plenty of sleep, get regular check-ups, drink 8 glasses of water per day, avoid red meat, and eat lots of organic fruits, vegetables and fish. You’ll lower your health care costs, and possibly your life insurance costs. So, it’s a smart financial decision to invest in good health.

Have you found a smart way to save on health care costs? We’d like to hear about it. Comments welcome.

As the year end approaches, you may find yourself reflecting on your financial magagement…did it get better or worse this year? And do you have a plan for next year which will get you to where you want to be, financially, this time next year? If you have a student loan, how much can you pay off in 2008? How will you lower your taxes? Or your out-of-pocket medical costs? Can you pay your bills and get started on saving for some big ticket item, maybe even a home?

Some people can develop a solid and effective financial mangement on their own, but others have complicated financial situations, and need help. If you have the time, you can probably learn much of what you need to know to act as your own financial advisor. But most people don’t have time or the confidence to play that role solo, especially when the stakes are high (ex: it affects family members).

That’s where a financial advisor comes in. A good one can assess your current financial situation, help you carve out a financial path, and then help you move down that path to help you achieve your life goals.

Mint’s Point of View

Financial advisors aren’t necessarily just for large corporations or the rich. They can help you plan for major expenses, investments, and help you prepare for life altering events like marriage, children, and college. They can help you manage your budget, refinance your mortgage, even lower your taxes.

Seven Steps to Find the Guru for You

If you decide you need a financial planner, you should know where to begin. And you should know how to pick one that will help you save and make more money. So, how do you find someone to worry about your money as much as you do?

1. Decide what your financial situation calls for. Do you need to establish or revisit your retirement plan? Do you want to buy a new car? Or put a down payment on a home? Are you trying to decide between an IRA and a 401k? Your goals can be broad or specific, long-term or short-term. What progress you have made so far in achieving your goals. Do you have a time table? What stands in your way?
2. Decide on a budget for advice, and the way you’d like to pay for it. Some advisors are fee-only; some commission only. Some charge a combination of fee and commission, and others offer salary-based services. Commission-based payments only save money if you keep the same investments for 7 years. Since the average lifespan of mutual fund ownership is 2 years, you’ll end up paying more. If you’re unsure, stick with the fee-based plans.
3. Use referrals and the Internet as starting points. Referrals shouldn’t be your definitive source of information. What works for a friend or colleague might not work for you. Sites like www.wiseradvisor.com and www.myfinancialadvice.com provide unbiased, criteria-based searches as opposed to zip code searches.
4. After your initial research, make a list of 3-5 financial advisors whom you’d like to meet. You can request a Form ADV from each advisor to learn more about them before you meet. That’s a form they must file with the SEC containing information about their services, fees, investments, business activities, and background information.
5. Hold initial interviews with your short-list. And confirm that the initial consultation will be free. They shouldn’t be charging you for an interview; this is their opportunity to sell you on their services. Here are some of the critical questions to ask during the interviews:
   • What licenses they hold, in which states
   • What services they provide
   • Their investment strategy
   • How they would prepare and implement your plan
   • Who their existing clients are (ask for references)
   • The average size of their portfolios
   • How their portfolios have performed
   • Their fees and/or commission fees
   • If they sell financial products
6. After the interviews, get critical. Did they seem straightforward and honest? Did they listen well and come up with good ideas for your financial plan? Did it seem like your situation was uniquely analyzed? Consider how well you got along with the financial advisor. Did you sense a rapport?
7. Lastly, contact their references and run a background check. Federal and state laws require that brokers, advisors, and forms be licensed and registered with the SEC. Sites like www.sec.gov and www.finra.org provide databases that allow you to investigate potential advisors. If you’re unsure about independent advisors, go with a major brokerage firm. Use sites like the National Association of Personal Financial Advisors (www.napfa.org) to find comprehensive question sheets and explanations of credentials.

By following this seven step plan, you’ll give yourself a great gift in the New Year: an expert partner in your quest to achieve some more financial success, goals and peace of mind. It’s a great head start on your New Year’s resolutions.

And we, of course, encourage you to Sign Up Now for Mint.com if you’re going to be looking for a financial planner. We can make it easy for you to get an accurate picture of your financial situation in time for your advisor interviews.

Money saving tips are something that we love here at Mint. Learn more with great money saving tips in our blog article index.

This year, instead of buying friends and family lots of material goods that they may or may not like or return, consider giving each other the gift of time. It’s not only less expensive, but can yield a much higher “return”. Here is a money saving tip: Do some greater good in the world by organizing a volunteer event with friends, family or co-workers (i.e. in place of that tired “secret Santa” gift exchange you may do each year).

Mint’s Point of View

When your family volunteers together, you demonstrate the importance of caring for others. By volunteering with family or friends, you’ll meet new people, learn new skills, strengthen bonds, and make a difference in other people’s lives. You also can’t help but become more appreciative of what you have. And when you consider that there are 3.5 million homeless people in the U.S. (1.4 million of them are kids), another 3 million more people in hospitals and retirement homes, and thousands of families disrupted due to military service this year — you probably have a lot to be grateful for. Why not “give back” by giving your time this season…and save some money by doing so?

Action Plan

Once you’ve sold the idea to your soon-to-be able group of volunteers:

1. Make a list of organizations you’d like to work with.
2. Set some guidelines: Do you prefer being outdoors, animals, assisting the elderly, helping the homeless, working with your hands? How much time can you spend?
3. Contact your target organizations to find out what volunteering projects they may have.
4. If you’re not sure where to start, here are a few Web sites that will match you up with appropriate volunteer opportunities.

The Holiday Project is a national, non-profit organization in 31 states focused on spending the holidays with people in hospitals and nursing homes. Ways to participate include visiting with the elderly, making and wrapping gifts, managing and organizing events, and contributing cash and goods. For group visits, you choose the facility, setup, and manage visits with the help of the Holiday Project staff.

Network for Good is one of the leading Internet-based resources for donors, volunteers, and charities. They provide a search tool for volunteers to find opportunities based on their interests and geographic location, or to search for organization by name. It also provides searches for individual or group volunteer opportunities. Through the site, you can even volunteer abroad, keep online records of your service, and maintain a private journal.

Volunteer Match makes it easy to find opportunities with at least 50 organizations by searching based on your interests, skills, and schedule. They allow you to search for specific organizations, group opportunities, and even virtual volunteering opportunities. You can also request email alerts when new opportunities based on your criteria become available.

Idealist is a non-profit where people exchange resources and ideas, search for non-profit jobs, and locate volunteer opportunities and supporters. Using their search engine, you can find opportunities based on: area of focus, location, age, language, date, and specific opportunities for families or groups. Idealist also offers email alerts.

Volunteers of America is a national, non-profit volunteer organization in 44 states. Projects include working with: the disabled, day care centers, and teachers; and helping offenders transition from prison to the community. Volunteer opportunities are available for individuals as well as groups and can be short-term, weekly, or monthly.

If you’ve used some of these web sites to find volunteer projects in the past, please add your comments below…how were they to work with? If you have a different recommendation for help in matching your interests with your community’s needs, please share that, too.

And if you do organize a volunteer project, please send us a group photo. We’d love to post it on the bulletin board in the Mint company kitchen. And we might just send you some t-shirts to say thanks!

Budget planning is something that we care about here at Mint. Learn more with great budget planning tips in our blog article index.

The holiday shopping season officially starts on the Friday after Thanksgiving. So, most of us are gearing up to tackle the our holiday budget planning. According to the Retail Federation, Americans will spend an extra $20 billion during November and December. Think about this at a personal level: if you charge an extra $1,000 on your credit card, and pay a minimum of $25 per month with 19% interest, it’ll take you nearly 5 1/2 years to pay for those gifts! And don’t forget that during those years, you’ll face five more holidays with more expenses.

Mint suggests a different approach this year. We’ve collected some ideas on how you can balance your desire to shower your loved ones with gifts, with your need to reach other important financial goals such as reducing debt and increasing savings. But we’re not Scrooge! Here are 10 tips from Mint to help you celebrate the holidays… while keeping your spending in check.

Make a List

• Know what you have. If you can only spare $600, it’s better to know that before you start shopping, instead of shopping blindly per person then attempting damage control afterward. You can use Mint.com to easily determine your average monthly spending by category and set a budget for your holiday gifts.

• Remember non-gift expenses. Holidays expenses don’t stop at gifts. They include travel expenses, gift-wrap, tape, food, household decorations, etc. Account for these things in your budget so there are no surprises.
• Best Option: Use cash. It’s harder to let go of money when it’s real cash. Handing over twenty-five $20 bills for that Play Station for your little brother might make you think twice. How about some new PS games instead of an upgraded player?
• Second Best Option: Don’t spend more that it’ll take to pay off in one month. Friends and family don’t expect you to sacrifice your credit for their happiness. If it’s going to impact your financial health and ability to reach your goals, they won’t want you to spend it.

Check it Twice

• Reduce the length of your “must buy for” list. Make up your “nice” list… and then review it. Do your hairdresser and mailman really need gifts from you? Reduce expenses by sending cards, or letters of praise to their bosses, if you want to share your appreciation.

• Think outside the (gift wrapped) box. Write a poem, sing a song, bake cookies, make arts and crafts, spend time, or make a coupon book for free chores. If buying for more than one person in the same family, buy a group gift-something they can all appreciate.

• Shop online. Malls are designed to get you to spend more money than you’d planned. With online shopping, you can make more objective, smarter purchasing decisions.

• Get the best price. Use comparison-shopping sites like nextag.com, pricegrabber.com, and bizrate.com to find the cheapest price. Ebates.com and rebatejunkie.com will refund a percentage of what you spend if you shop through them. Search Google for coupon codes to get free shipping or a percentage off your total. Keep track of prices before or after you buy using services like those mentioned in our recent 5 Sources for Savings and Rebates on the Web post.

Plan Ahead

• Keep detailed records. Know what you bought, for whom, and for how much. Keep a tally of what you’ve spent and what’s left. This will ensure you don’t exceed your limits this year … and will help you plan a budget for next year.

• Put money away. Starting in January, put money away monthly in a high-yield savings or money market account. At the end of the year, you’ll have what you need for your 2008 holiday shopping.

Build your gift giving fund! When you easily earn rates 11 times higher than that of the national average with high-yield accounts, you’ll be better able to meet the budget you have set for your next year’s holiday shopping.

Accelerate your savings. Here are two accounts that offer high-interest.

E*Trade Max Rate Savings

No fees & no minimum deposit.

Sign Up

These are some of the shopping strategies we’ll be using this year. What are some others that you’ve found helpful?

Shop smarter this season. Sign up today for Mint.com to plan and track your holiday spending. You’ll be headed for a happier New Year!