I’ve been known to rush the holiday season, but it seems like things get started earlier every year. It used to be that the day after Thanksgiving was the official start to the holiday shopping season, but the money-conscious consumer may want to start even sooner. Whatever your feelings about starting the celebrations early, everyone can agree that making the holidays more affordable would be a welcome change.

The main problem with waiting to start your holiday shopping until late November or early December isn’t just the crowds or the time crunch; you may be setting yourself up for more interest charges from your credit card. If you use credit cards to finance your holiday shopping, then cramming all of your purchases into a short time frame will likely cause the majority of them to land on one credit card bill. If you want to avoid starting the New Year further in debt, start your shopping as early as possible. By spreading purchases across multiple statements, you’ll be more likely able to pay them off in full, or at least pay more towards them.

It’s also important to remember that the best deals aren’t only in December. In an effort to entice shoppers, who normally get started on Black Friday, Wal-Mart recently began offering deals that previously would only have been offered at such a time. You can see the latest items at their “secret” website.

Sales after the holidays are often the best ones of the year. Just as you should make some purchases early, you may be able to delay others until after the holidays to save the most money. My sister-in-law is notorious for stocking up on wrapping paper in January, when stores are practically giving it away, to be used for Christmas the following year.

One last thought about waiting until the last minute to do your shopping: When you start to get desperate for gifts, you'll likely trade value for convenience. Paying more for expedited shipping or buying items that aren’t on sale are expenses that can be avoided.

If cash flow becomes an issue at any time during the holiday shopping season, avoid running up debt on your high interest rate credit cards. There’s plenty of time to apply for a person-to-person loan from Lending Club and still get an early start on your holiday shopping. The holidays are supposed to be joyful times, but many people are overwhelmed with the stress of shopping and figuring out how to pay for it all. By starting early, you’ll be able to make your shopping experience less stressful and more affordable.

Here are six more tips to insure that your Holiday spending doesn’t break the bank. The first six tips can be found here.

1. Watch the small expenses – When setting a budget for Holiday spending, make sure to include small expenses, such as postage, shipping, wrapping paper, greetings cards, etc.

2. Avoid spending future money – Don’t plan on paying off your holiday debt by hoping for a tax return or a wage increase. This is money that might never appear and you might be stuck with paying for debt for longer periods of time. If you know you have some big-ticket items you’re buying, get a P2P loan through Lending Club to cover these expenses.

3. Give your time – Would your kids appreciate two fishing trip “coupons” more than just buying them a $75 video game? Or would giving your friend a “3 lunches on me” coupon make a better gift? There are many different ways that you can give of your time and it would be a more meaningful and cost effective gift.

4. Get the kids involved – If you have kids, have them design the cards that you will send out to close family and friends. This will get them excited in a time that is often stressful for the parents, and it will make the cards stand out from regular store-bought cards. It’s a fun family activity that will also save you money.

5. Don’t open up a new card in every store to save an extra 10% – Open up a new card in every store and you will end up spending more than you ever budgeted for. On top of that, you might end up carrying the balance for a long time and paying high interest rates on balances.

6. Don’t give gift cards – While gift cards may seem helpful by saving you time and ensuring the recipients get what they want, you may want to think twice about giving them. The cards might go unused or get lost. Merchants might also tack on hidden costs and fees.

Do you have any good tips to share?

A common practice for those trying to allocate their savings into reasonable categories is to set aside some short-term savings for the inevitable unexpected expenses.

Why you need it

We all have unplanned disruptions in our expected cash flow. It can come in the form of an unexpected expense, such as your car breaking down, or an unexpected loss of income, due to layoff or similar. By planning for these situations, you can avoid having to turn to high-rate credit cards to get you through. Of course, readers of the Lending Club blog know that P2P loans from Lending Club would likely be much more affordable than using a credit card if they hadn’t implemented a short-term savings plan yet.

How Much

The general rule of thumb is to have three to six months’ worth of living expenses in your emergency fund. While this number can seem overwhelming, remember to think of your living expenses in the scenario where you need to use your emergency fund: if you’re desperate enough to dip into your emergency account, then you’d probably also be willing to cut back on some of your non-essential monthly expenses. You can use your bare-bones essential monthly expenses as a primary goal, and then increase your amount to include all of your monthly expenses once the first goal has been met.

Where

Most people look to traditional, safe investments for their emergency fund savings needs. These include money market accounts and short-term CDs. These accounts tend to be very low risk and are accompanied by the expected low rate of return. Aside from being low risk, these types of savings methods offer the liquidity that is typically needed to fund the unexpected. If you didn’t need the money quickly, then you could probably think of more lucrative ways to invest.

Building up your short-term savings is a smart thing to do. You’ll be protecting yourself from taking on debt when the inevitable finally comes to pass. There are many ways to save and invest your money, and creating a short-term savings account to handle emergencies is an essential part of all well-crafted financial plans.

As we celebrate Veterans Day this weekend our thoughts here at Lending Club turn to service members and their finances. Well over a million U.S. troops have deployed in support of Operation Enduring Freedom and Operation Iraqi Freedom since September 11th, 2001. Many of these soldiers and their families face unique financial challenges during operational deployments. The challenges can be especially disruptive to Reserve and National Guard troops who may leave a better paying civilian job behind.

From a financial perspective, however, there are several potential benefits soldiers can receive while deployed to Iraq or Afghanistan (and most other countries in the region supporting those operations). In fact, one Air Force officer was recently featured in the New York Times after he volunteered to deploy in an effort to help him get out of debt. He has kept a blog about his journey to Financial Freedom in Iraq.

Here are a few of the financial benefits available to deployed soldiers:

Soldiers' and Sailors' Civil Relief Act - Wartime deployments can make it very difficult to fulfill financial obligations and exercise legal rights. To help mitigate these challenges, Congress has enacted the SSCRA. The two most used provisions under the SSCRA are:

• Service members with deployment orders may terminate leases early without penalty

• Service members may cap the interest rates on any outstanding debts at 6%. This applies to any debts incurred prior to the service member coming on active duty

Savings Deposit Program - Service members deployed in combat zones, qualified hazardous duty areas, or certain contingency operations may deposit up to $10,000 into the SDP where interest will accrue at 10% during the deployment.

Tax-free income - Income earned in combat zones is excluded from federal and state income tax based on the Combat Zone Tax Exclusion. Enlisted soldiers who choose to extend their contract while in a combat zone also receive their re-enlistment bonus (sometimes as high as $30,000) tax-free.

Hazardous Duty Pay - $100/month (This extra pay is listed as SAVE pay on Leave and Earnings Statements.)

Per Diem - This is only $3.50/day for locations like Iraq and Afghanistan, but for a year-long deployment it will add up to more than a thousand dollars.

Increased potential savings - Many soldiers, especially single soldiers, can greatly reduce their expenses while deployed. Rent, food, utilities and other expenses can be minimized or eliminated. There are also limited opportunities to spend money. This gives many soldiers the opportunity to pay off debts or jump start their savings.

Hostile Fire/Imminent Danger Pay (HFP/IDP) - $225/month

Family Separation Allowance - $250/month for married soldiers

Assignment Incentive Pay – Recently, the Army announced most tours will be extended from 12 to 15 months. Those that are involuntarily deployed for more than 12 months receive $1,000 for each additional month or portion of a month served.

There are many organizations that support the military. One of these, the Non Commissioned Officers Association (NCOA), was established in 1960 to enhance and maintain the quality of life for non-commissioned officers in all branches of the Armed Forces, National Guard and Reserves.

Lending Club recently partnered with NCOA to provide additional services and benefits to service members and their families. Through this partnership, NCOA members can borrow and lend to each other directly and get better rates than those offered by banks or credit card companies.

I’d like to expand on an idea that I mentioned in my recent post Burning Money at Both Ends. The issue of cutting back on retirement savings due to short-term financial difficulties is a serious one that warrants further discussion.

It used to be that retirement plans were pretty automatic. As I discussed in my post about the transition from defined benefits plans to defined contribution plans, things are no longer quite so simple. Gone are the days of the pension plan for most people. With it, the responsibility of providing for your retirement has shifted from your employer to you. As a result, putting money away for your retirement seems more like an expense than it used to, because you have control over how much money goes in and how it is managed.

The trouble is that the effects of cutting back on your retirement savings, while it may provide some temporary relief, won’t be felt until it’s too late to do anything about it. You need to remember that there are other ways to afford things before you reduce your retirement contributions. Many consumers have started using Lending Club’s person-to-person loans in situations where they previously may have taken funds from their retirement allocations.

The general rule of thumb is that you should be saving about 10% of your gross income for retirement. Depending on your age, and your expected retirement lifestyle, the amount that you should be saving will likely differ from one person to another. Realize that under-funding your retirement will likely mean that you’ll either have to work longer than you’d like to or live much less comfortably in retirement. Is such an outcome really worth the benefits of what you’re considering spending money on today?

Even worthy expenses like your children’s college education probably don’t warrant cutting back on your retirement savings. You have much less time to get your retirement properly funded compared to your children’s timing for repaying college expenses. It’s not selfish to take care of your retirement over your children’s education, since having an under-funded retirement plan will likely burden your children at least as much.

Every financial decision we make results in an opportunity cost of what we could have done instead. Do not allow that cost to grow to an unacceptable level by reducing retirement savings to pay for more immediate concerns. Retirement saving has become too important in the world to allow short-term needs to jeopardize your long-term financial well-being.