It happens every year. The holidays arrive and no matter how long you had to prepare, it seems that you never saw it coming. While the holidays are full of good food, decorating the home and quality time with loved ones, it also comes with a huge expense. Funding Thanksgiving dinner, Christmas parties and gifts add up quickly. For those that have many people to shop for, you can find yourself easily going into debt for the season. Before you charge up those credit cards or get behind on some bills again this holiday season, consider having a debt-free holiday by doing things differently.
Planning and Budgeting
This year make a list of how much you can really afford to spend on each person you need to shop for.
Leave a section on your list for these additional items:
- Food and drinks
- Travel expenses
- Tips for year-long services like the newspaper delivery and babysitters
- Christmas cards and postage
- Extra gifts for non-family members like neighbors and teachers
- Entertainment costs of food, drink and decorations
Look at your budget to determine if there are areas you could cut back for now. For the next few months, you may need to cut down on your entertainment money, money you put into savings accounts, money used on your morning coffee run and money spent on hair appointments. You'll need all of the money you can find in your budget to put towards the holidays and once you have everything paid for, you can enjoy your regular splurges once again. Find any extra money in your budget that isn’t a necessity to help afford your holiday spending. You can also try to work extra hours for a few months and sell old items you don’t need to earn extra cash. Next year, you can start saving earlier in the year to avoid having to do this again.
Shop Online
One problem with shopping in stores is that you might be tempted to buy something you hadn’t planned for. You might see a beautiful item for your home, a gift that someone would like that is not on your list or something you want for yourself. This is not the time of year to buy extra items when you already have so much to shop for. Shopping online means you won’t see enticing store displays and you'll have more willpower to only buy what you can afford. Place your order and GET OFF the website before you start browsing and buying extra items.
Plan Ahead
In the future, start saving money for the holidays in January. Putting aside even $20 a month will give you $200 to spend by October. This will give you a good start next holiday season. You can even start a holiday savings account at many banks and credit unions.
One way to lower costs is to give homemade or baked goods as gifts. Here are some ideas that cost less than $10. This is great for those that you normally tip for their yearlong services. For teachers, the newspaper deliverer, the babysitter and the housecleaner, consider baking cookies or making something homemade instead of giving them cash or a gift. Plan ahead so that the items are ready before school lets out for Christmas break or before your babysitter takes time off for the holidays.
Being in Debt During the Holidays
If you’re trying to shop for the holidays and find yourself struggling with old debts, consider using this time of year to tackle your debt. If you can’t afford the minimum monthly payments on top of purchasing items for the holidays, talk to your bank or other professional about debt consolidation options that might be a good fit. A debt consolidation loan can take all of your debts and consolidate them into one loan. This new loan will often reduce your monthly payment and lower your interest rate, so you will save money each month. That money saved will be perfect in helping you accomplish your holiday spending.
This year, don’t go into debt to fund your holiday expenses, but instead carefully plan out your spending.
