Christmas is a time of giving, but don't let it be a time of debt. Budgeting expert, Nathan Lippincott, shares advice on how to get through the holiday season without racking up debt.
Christmas is the time for celebration and family. It is the holiday of experiencing the joy of gift-giving. But when it comes to buying and giving gifts, the financial repercussions can leave a decidedly NON-joyful aftertaste. You can avoid overspending by creating and holding to a budget for Christmas. Imagine being able to celebrate guilt-free and without months of agony and monetary difficulties to follow.
Avoid Credit Card Purchases
The most important part of your Christmas budget is to maintain the policy of not going into debt for ANYTHING. No gift is worth disrupting a financial plan or negating any progress made earlier in the year. So many families put their Christmas on credit cards and then spend all of the following year paying for it, only to repeat the mistake again when December rolls around.
In a survey produced by CreditDonkey.com, 37% of people said they use credit cards to finance their Christmas spending. That means nearly half of the population is spending outside their means every single year. The impact of that decision is incredible and serves to keep individuals in debt and struggling financially for their entire lives. There is a better way!
Save All Year Long
Christmas is on December 25th of every year – it is not a surprise; it does not “sneak up” on us, so make a plan for it!! Starting in January of every year, create a special account specifically meant to save money for Christmas. Sit down with your spouse and decide exactly who you plan to buy gifts for and how much you plan on spending on those gifts. You will assign a specific dollar amount to each and every person. Add up the total and divide it by the number of months before the holiday and you have your monthly savings goal.
When December arrives and the shopping begins, remember to you spend only what you have budgeted. If you doubt your self control, take your money out in cash and only spend that amount. This helps prevent overspending what you have budgeted. When the cash is gone, you are done shopping. Period.
Another tip is to purchase a few gifts per week (or even per month!) and not everything at once. This will allow discretion to be a part of your shopping and prevent a panicked snatching of all the "sales" that crop up around this season. Remember: no matter how good a sale is, it is not a good sale if it is not in the budget!
Gift Without (Over)Spending
There is absolutely no need to go into debt to buy something for anyone. If you find that you do not have quite enough saved for what you had decided to spend on gifts, you can come up with ways to gift without spending much. Here are some examples:
Give someone a coupon for house cleaning or yard care, which you can do yourself.
If you are particularly good at baking, make cookies, fudge or brownies - you can create a lot of goods without spending much money.
Give grandparents a photo of your children - let the kids make the frame as an arts and crafts project.
If you have multiple children, buy gifts that can be shared such as board games, music, tickets or certificates for “experiences”.
If you have a large extended family, suggest a gift exchange – where each member puts their name on a paper and then these are drawn to determine who buys for whom. It's a good idea to set a price limit for everyone to follow on this one.
Christmas is NOT about gifts and presents. It is about being together as a family and loving each other. If you have young children, they will have no idea what you spend on them and will not remember how many toys they received from one Christmas to the next. They will only remember the fun and laughter they experience with you.
Christmas should be about spending time with family, not buying things you can't afford.
Check out some of these websites for additional ideas on a thrifty Christmas!!