Have you resigned yourself to the idea that it’s impossible to have a debt free Christmas?
It seems the holidays get more expensive every year and it can be hard to keep up with expectations. Even stocking stuffers have become outrageous, with small novelty items being replaced by expensive high-tech gadgets.
One mother admitted that she spent more than $150 on each of her children’s Christmas stockings. So, it’s easy to see how holiday spending can easily get out of control.
Unfortunately, the joy of the season can quickly become a source of stress in the New Year if your eating, drinking, and being merry was bought on credit. We all feel generous at Christmas, and the list of people we want – or need – to buy gifts for seems endless. But, the fun of giving can be dampened by huge bills that take a year to pay off.
Christmas shouldn’t be stressful – at least not financially. And, with a little wise planning, it doesn’t have to be.
How to Have a Debt Free Christmas
1. Make a Budget – And stick to it! If you don’t plan and monitor your spending it can quickly get out of control. So, sit down, look over your finances, make a list of expenses (gifts, parties, the Christmas Turkey, etc.) and figure out how much you can comfortably spend on the holidays.
Many people make the mistake of not including the smaller details such as the cost of Christmas dinner, hors d’ouevres, wrapping paper, travel, or even a tree. While gifts will likely make up the bulk of your holiday budget, those often forgotten items can really add up. To make sure that you stay within your budget and have a debt free Christmas, try to plan for all potential expenses.
2. Start Saving Early. One of the most important keys to any balanced budget is planning ahead. And, Christmas should be no different. We know it’s coming, yet it still seems to sneak up on us. Before we know it, it’s December and we have a long list of gifts to buy and no idea where the money is going to come from.
You can avoid this stress by starting your holiday fund in September – or even earlier. If you were to set aside just $10 a week for a year, you would have $520 to put toward your Christmas expenses. A lot of banks and credit unions offer a “Christmas Club” where you can save a little each week in a savings account and then cash out the account later in the year for Christmas spending, debt payoff, etc. Waiting until December to think about the holidays may lead to a big credit card bill come January, and then you will have to pay for Christmas with interest!
3. Shop Early. While there are great Christmas sales, many retailers will charge more for certain items simply because they are in demand during the holidays. By shopping during the off season, you may be able to get some products at great prices. For example, things like napkins, decorations, wrapping paper, and holiday-themed dishes or decor are often sold after Christmas for a fraction of their pre-Christmas price. So, why not stock up on some of these items? You will appreciate the savings next December!
Shopping early will also allow you to spread your costs over a longer period of time so there is less stress on your budget. Plus, most of us will admit that if we are pressured to finish all of our shopping in a limited amount of time (usually because we started too late) then we are more likely to overspend. When you have two hours to find the perfect gift, you don’t really have the time to look for sales.
4. Make A List – Check it Twice – And Then Stick To It! Just like a budget, a list is a great way to stay on track. If you know what you need or what you are looking for, you won’t wander the aisles aimlessly grabbing random items. It has also been shown that without a budget, and a list, – and a determination to stick to both – people are more likely to make rash decisions that can lead to overspending.
5. Look For Sales. If you plan ahead of time, you will be able to keep your eyes open for sales and bargains. Visiting discount stores, outlets, or warehouses is another way to find great deals on brand name products. Take advantage of 2 for 1 sales, Buy One Get One Half Off, or other similar promotions. During certain times of year, if you purchase $100 or more worth of gift cards, some retailers and restaurants will include an additional $25 card for free. Then you would have a gift for someone else on your list without having to put out any extra cash!
6. Shop Online. Online shopping has become very popular because it’s so easy to find the items you want at great prices. You are able to compare prices, read customer reviews, and see product ratings without leaving the comfort of your home. Plus, many retailers offer additional discounts for online purchases, so you can often buy merchandise cheaper from their website than if you went to their brick-and-mortar store.
Also, with a little research, it is possible to find online sellers who offer free shipping, special deals for Pay Pal users, discounts for first time customers, and cash back or points rewards. Sites such as ebates can be a treasure-trove of money saving coupons and cash back promotions. In a way, you actually get paid to shop through them!
If you have the time and patience, internet auctions on sites such as ebay also offer many brand name products at discounted prices.
7. Use Coupons and Reward Points. Besides newspapers and flyers, many valuable coupons can be found on retailer websites or specialized coupon sites. Before purchasing anything, take a few minutes to see if you can find an online coupon for the product you are wanting to buy.
Plus, if you are disciplined enough to pay your balance in full on time, you can save a lot of money by using your credit card for everyday purchases. Many cards offer rewards such as cash back, air miles, store discounts or free merchandise. Let the points accumulate all year then use them to help with your Christmas purchases.
For example, this baby store coupon gets you a discount:
8. Use Cash. If you have set aside a little bit of cash each week, by Christmas you will have a nice nest egg to put toward your holiday expenses. If you determine to use only cash, rather than credit, you will not have to worry about going into debt to pay for Christmas. If you want to use a credit card to benefit from the points or rewards, then make a commitment to use the money you’ve saved to immediately pay off any charges made.
9. Be Creative. The value of a gift is not always determined by how much it costs. Listen to your friends and family when they talk and file away any inexpensive ideas that may make great gifts. A $20 gift that someone really wants is often better than a $100 gift that they don’t like or won’t use. Plus, it’s more personal and shows people that you actually paid attention and put some thought into choosing their gifts.
10. Give Homemade Gifts. Not everyone appreciates the time and effort that goes into homemade gifts, but we all have a few people on our lists who would value the thoughtfulness. From baked goods to crafts, DIY gifts can add a personal touch while also saving you a lot of money.
With these tips, you can enjoy a holly, jolly, and debt-free Christmas that builds happy memories rather than high-interest credit card bills.