With the holiday season here, it’s filled with cheer and plenty of spending. The holiday season has turned into a time of the year where the quantity of material possessions trumps thoughtfulness and the true reason for the season. Whether you celebrate Christmas, Kwanzaa or Hanukkah; they all symbolize spending time with loved ones. This is the time of the year when stores and credit card companies make a killing getting shoppers to overspend. The holiday season allows individuals the chance to rationalize overspending and to dust off credit cards. These should be the days of Giving Thanks and being Jolly, Merry and Bright! Not Broke, Greedy, Stressed and In Debt. So who says we have to go into debt to enjoy the Holiday Season? Let’s NOT break the bank for just Christmas sake!
We don’t have to give in to the temptation and overextend ourselves financially for the sake of buying unnecessary gifts. So, here are some tips to attempt to get through the holiday season without any new debt.
List & Limits
Create a holiday shopping list, set a spending limit for each person and only buy for who’s on it. Leave your emotions at the door. With sales and deals in every retail window, it’s easy to get sucked into purchasing items that you never planned to buy. Using the money you have set aside in your budget, or using cash you have readily available (don’t use credit), create a cash-only Holiday budget – and stick to it! Keep track of your spending. Remind yourself of all other debt responsibilities like your car payment, rent or mortgage, etc. that will be still be due after the holiday season.
Pay cash, pay cash, pay cash. Christmas Savings Clubs and Christmas Bonuses are cash options that allow debt free spending. Avoid using credit cards and do not charge purchases. Buying gifts with cash will avoid the unwelcoming surprises, interest rates and fees that will come knocking in January. When the cash is gone, stop shopping and refuse to use credit.
Thoughtfulness over cost
Pay attention to family and friends and purchase gifts that make the person feel special. Pay attention to hints or comments throughout the year. And, do not rule out handmade gifts. Sometimes handmade gifts mean the most. Remember the cliché’, “It‘s the thought that counts”? Well, it may be corny, but it’s true. Put time into choosing the gift that the person wants, not the gift that makes you look generous.
Start Saving for Next Christmas
Christmas is the same time every year, yet somehow we manage to wait until the last minute to make purchases, often without a budget. Consider joining a savings club or opening a savings account that you can’t touch. By putting away $50 each month you will have $550 to spend by the time Christmas rolls around. Also consider picking up gifts throughout the year, which will definitely be easier on your wallet come December.
Buying gift cards monthly or every pay period is an automatic saver for year-end holiday spending. These gift cards can be used to purchase Christmas gifts for family and friends or just given as gifts themselves.
We tell ourselves it is fine, we will worry about it in the New Year. When the New Year comes we are faced with a “financial debt hangover”, where we then spend the entire year trying to pay off our debt, only to do it all over again! Don’t create new damage and repeat the cycle.
Cicely Jones is the owner of MPA Financials, a Full Service Accounting Firm with 15 years’ experience. Cicely has a passion to spread knowledge of financial empowerment by educating clients and giving sound financial advice.
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