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How to host a holiday party without killing your budget (or credit)

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How to host a holiday party without killing your budget (or credit)

Overspending can really be a buzzkill to the joy and spirit of the holiday season, and it's a pretty common problem. While most people think of gifts and travel when they think of holiday spending, WisePiggy's recent poll found that food and beverage are a significant part of holiday spending, too, with 44.48 percent of respondents indicating they plan to buy food and beverages for holiday parties.

We talked to a few professionals to get tips on hosting a great holiday party while keeping your budget (and credit score) intact.

Cutting cocktail costs

Alcohol can get pricey, so it pays to utilize a warehouse club membership to buy bulk booze during the holidays. If that's not an option, Kendal Perez of HassleFreeSavings offers a few strategies, including the 70/30 rule.

"Opt for boxed wine and serve it in a carafe, or buy highly-rated but well-priced bottles of wine," she adds. "For beer drinkers, adopt a 70/30 rule: 70 percent cheap domestic, 30 percent schmancy craft brew."

Asking guests to bring a bottle is another acceptable route to save on alcohol.

"We typically supply home brew and a couple bottles of wine, but otherwise we suggest people bring something to drink," Perez says. "This fulfills their desire to contribute and helps us save money on booze. Plus, it's hard to know what everyone likes to drink, and you often end up buying everything to compensate."

Shop the season

You probably already want to serve in-season dishes to get guests in the holiday spirit. But there's an added bonus to shopping the season: ingredients are usually cheaper.

"You may be famous for your blueberry pie dish, but you're going to pay a pretty penny for summer berries in the dead of winter," Perez says. "Instead, impress your guests with your mad squash skills or killer pumpkin bread recipe. Shopping in season provides you with the freshest, best-priced food available. Plus, who doesn't crave pumpkin spice everything this time of year?"

If you do insist on making that famous blueberry pie in the the fall, Perez suggests buying frozen fruit, especially if you are baking. You can save 30 percent or more, and you likely won't notice too much of a difference in taste.

"Most produce is flash-frozen at its peak ripeness, meaning you won't sacrifice flavor while saving money," Perez says.

Also, it's convenient to buy pre-made dishes for your party, but you'll pay a pretty penny for that convenience. Perez says pre-made options are often marked up from 40 to over 100 percent.

"Even boxed mixes of cake, rice dishes or pasta is a better deal than what you can purchase from the deli," she tells us. "If making a whole spread of dishes is too overwhelming, enlist a co-host to share the labor, cost and glory."

Of course, you could always go the potluck route, too, and have your guests bring a small dish.

Take advantage of rewards

If you can do it responsibly, another way to get the most out of your holiday food spending is to use credit card rewards programs.

To earn rewards with your food purchases, you could use credit cards that offer incentives on grocery or restaurant spending. Or, you could sign up for a new card that offers a sign-up bonus if you hit their minimum spending requirement. During the holidays, it might be easier to hit that minimum.

While the cash-back percentages aren't much -- usually around 1-2 percent -- the rewards can help offset at least some of your spending.

Brad Barrett is a rewards coach who helps people optimize their savings with these types of programs. He offers a disclaimer.

"It is important to remember that you should only open a rewards credit card if you can be responsible with your credit card, which I define as paying on time and in full every month and not spending more just because you're using a credit card," Barrett says. "If you can do that, then credit card rewards can be quite valuable to you."

You'll also want to look into the fine print of each program, including the interest rate, late fee and annual fee. The annual fee may not be worth the amount you earn in rewards. And if you don't pay your card in time or completely, not only will the fees and interest rates cancel out your earnings, they could keep you trapped in a debt cycle.

Thomas Nitzsche of ClearPoint Credit Counseling adds some additional words of warning.

"Ideally, consumers should set aside money throughout the year so that they are not relying on credit cards to finance the holidays," he says. "Using credit cards to strategically earn points on the spending is a great idea, but only if you can pay it off without accruing interest."

Also, don't open a card at every retailer. It can be tempting to get the discount, but you should be discerning.

"If you want or need a new line of credit, open one strategically that can be used where you plan to do a lot of shopping or a general-use credit card that can be used anywhere," Nitzsche says. "Also do not open a line of credit and then immediately close it as it will negatively affect the credit score."

How to protect your credit

Nitzsche says his organization, which counsels consumers on how to get out of debt, sees an increase in clients after the holidays.

"We consistently see an uptick in the number of clients seeking counseling in the first quarter of the year, so this spending clearly forces some consumers over the edge to the point that they feel they need help repaying their debt," he says.

It's important to know how to keep your credit intact around this time of year, when it's especially vulnerable.

Holidays or not, you should review your credit regularly. To get an overall idea of where you stand, get your free credit score from WisePiggy.

One metric you want to protect is your debt-to-credit ratio. Nitzsche says you should never charge more than an amount equal to a third of your credit card's limit. And, again, you shouldn't pay your card late or skip a payment.

To avoid feeling financially overwhelmed after the holidays, it helps to be cautious about your spending beforehand. And food is one spending area people tend to underestimate. With some frugal habits and credit vigilance, you can host a great holiday party without damaging your budget or your credit.