Although the holiday season is a magical time of year, the frivolity that goes along with it can wreak havoc on your financial plan. No one wants to deny themselves or their families the fun and celebration that goes along with the season, right? Before you know it, you find yourself spending more money than you intended to spend, charging purchases you can’t afford on credit cards, and spending the months after the holidays staring at the pile of debt you’ve added to your life.
This year, though, you could stop the holiday spending hangover by pledging to get through the holidays without incurring any new debt. I know it will be tough, but I think you can do it if you follow these steps.
Write up a holiday list. Begin by determining how much money you can spend on your holiday festivities this year. Next you’ll need to list everything that you plan to buy this year. Don’t forget to account for special family dinners or travel plans. Finally, you should assign a dollar amount to each item on your list. Take care, though, that your list doesn’t add up to be more than the budget you set in the beginning of this step.
Pay with cash for everything. Paying with cash serves two purposes. For one thing, paying with cash keeps you from charging something with your credit card (with the promise to pay your statement in full) and, then, getting sidetracked when the bill comes. Secondly, paying with cash encourages you to get the most for your holiday dollars. There’s just something about handing over your hard-earned cash that makes you think twice about each purchase.
Share entertaining costs with friends and family. Don’t feel like you have to prepare and pay for a huge meal for your holiday celebration all by yourself. Instead, why not go potluck? Sharing the expenses of your get-togethers will keep the cost of entertaining from being to burdensome for anyone and allow you to skip some of the stress of preparing for the party.
Don’t fall victim to panic purchases. The most carefully-planned holiday budget can get totally trashed by panic purchases. You know what I mean, right? Maybe your neighbor surprises you with a Christmas gift, so you feel like you have to get him one. The problem is that you didn’t plan to get him a gift, and there’s no room in your budget. Instead of rushing out with your credit card to get him “something,” offer him a sincere thank you and let the matter go. If you really feel like you have to reciprocate in some way, you could always take him a plate of goodies from your holiday baking later.
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{ 7 comments… read them below or add one }
I buy gifts all year and stash them in a couple of drawers upstairs in my craft room. When special occasions, holidays, etc arrive, I choose items from my stash drawer as gifts. I’m never forced to spend money when holidays arrive.
Works great!
Some great tips here! I have been saving for Christmas ever since the beginning of the year. Now I have a nice lump sum of cash that I can spend on gifts, travel and everything else that comes along with the holiday.
Planning and saving for things really does have such great benefits. Now I can relax and enjoy the holiday, instead of freaking out because I need to have a bunch of money and buy a bunch of gifts, etc etc etc.
My wife is telling me we should start now like we did last year – yes we save especially with all the deals going on – but it is hard becuase ussually kids change desires just before christmas.
I would start buying gifts throughout the year. Great way to budget
I think the best thing to do is tell all your friends and family members NOT to buy you anything this Christmas, or esp not expensive.
Then, you’re off the hook!
Best, FS
Great post and great comments. I particularly agree with the commenter who buys gifts throughout the year. This is one of two huge keys for me.
An example. Say your holiday budget is anywhere in the range of $600–which may or may not be an average. If this was your budget, and you were able to spend $50 per month on Christms shopping starting at the beginning of the year, you just adjusted the $600 punch in the mouth that usually comes your way to nothing more than $50. Of course, there would be more planning involved and more forethought, but think of the absence of stress over this bill.
Second–shop the internet!!! I can almost always find a cheaper deal on ANYTHING I am trying to buy simply by researching the internet and making my purchase there.
In my family we have come to the conclusion that it is more important to spend time together than to buy stuff for each other. Most of us already have all the necessary things and also lots of unnecessary things. So, there is no need to add to our collections of stuff. But there is always a need for good bonding with family and friends.