5 Ways How To Debt Proof Your Christmas
It has become typical for people to spend thousands of dollars on Christmas gifts in the United States. This amount doesn't even take into account money spent on shipping costs, party costs and other extras that are typical during the holiday season. Very often, people simply throw caution to the winds when spending for the holidays. While this may provide for a joyous Christmas, the unfortunate result is a painful Christmas debt hangover in the new year.
In this article, we will discuss some smart strategies to help you plan carefully for your holiday expenses to help avoid debt at Christmas and in to the year to come.
1. Avoid Using Credit To Pay For Christmas
For many people, paying for presents and holiday revelry with a credit card is simply a matter of course; however, paying for this kind of one time, transient pleasure with credit is not a wise step. Credit should be reserved to pay for things that will provide value and/or increase in value as time passes. It should not be used to pay for consumables. Be that as it may, in today's society many people pay for everything with credit. This is a habit that smart shoppers should strive to overcome.
To avoid paying for Christmas with credit, it's smart to plan for Christmas year round. Look for genuine sales throughout the year on items that people will enjoy receiving as Christmas presents.
Tip: The very best time to shop for Christmas presents is at the end of December and early in January.
Of course if you are just starting your Christmas shopping now (a few months before Christmas), you will not be able to use this tip at the moment; however, tuck the thought away to use after Christmas this year to plan for next year.
2. Prioritize Your Gift List
Many people spend a great deal of money unnecessarily in excessive buying for an extended gift list. Sit down and do some serious thinking about who you really need to purchase gifts for.
Gift Priorities Break Down
- Naturally you would place your significant other and your children at the top of the list.
- Your close friends and family members should come next, followed by extended family members.
- Coworkers, acquaintances and people you encounter in passing would be last if they make the list at all.
Close Family - Before the holidays have a serious discussion with those closest to you about what they would really like most as a single gift for the holiday season. You do not have to purchase vast amounts of opulent gifts for the people closest to you. Instead, focus on providing a single heart’s desire. Think about what your close friends and family members will enjoy the most and get the most value from. Focus your gift purchasing (or making) efforts on that.
Extended family members - Consider a generous gesture instead of a gift. For example, a party, an open house or an open invitation throughout the holidays might be of more value and more appreciated than an impersonal gift. Very often we don't know our extended family members well, and the opportunity to spend some quality time together makes a very fine gift indeed. An invitation to share a meal and watch a movie is sure to be appreciated and to create treasured memories.
Note: Not everyone celebrates the holidays for the same reason, but most enjoy that festive time of year.
Coworkers - They may be very happy with a special dish brought to work to share with everyone. Acquaintances and people you encounter may be perfectly satisfied with a sincere wish for happy holidays. All political correctness aside, you should not fear offending people by wishing them a happy holiday season.
3. Decorate & Cherish Quality Time Together
Holiday decorations are expensive, fragile and a burden on the environment. Many of them are single use items that you will simply have to purchase again next year. Instead of spending a fortune on decorations, spend quality time with your friends, family members and others creating decorations for your home. Your children will especially enjoy this, and creating and displaying their own homemade decorations will also create memories that will last a lifetime.
- Old-fashioned decorations such as strings of cranberries and popcorn or chains made of construction paper are easy to make and very pretty.
- If you've had the presence of mind to save last year's Christmas cards, it is easy to cut out the images on the cards and add a string to hang them from the tree.
- If you use Christmas lights, be sure to choose light emitting diode lights (LED) for their dazzling brightness and energy savings.
- Save money on a Christmas tree by either selecting a high quality artificial tree that you will use year after year or choosing a live tree that you can replant in your yard.
Alternately, instead of having a tree in the house you might choose a tree outside to decorate festively for the birds and squirrels.
A live outdoor tree decorated with edible ornaments such as strings of popcorn and cranberries, slices of fruit and peanut butter balls rolled in birdseed is made even prettier during the day by lively, grateful wild visitors. String your outdoor tree with lights for a festive nighttime appearance.
4. Holiday Entertaining On The Cheap
Save money on your holiday entertaining by watching for nonperishable items on sale throughout the year. Some excellent examples include wine and alcoholic beverages. These will keep indefinitely. When you see excellent bargains throughout the year, take advantage and stash them away for the holidays. The same goes for any canned items you may use during the holiday season and also for large cuts of meat that you can freeze.
Tip: When the time comes to entertain, instead of taking the entire burden on yourself, host a potluck. Ask your guests to bring their own specialties to share with others. This makes for an exciting and adventurous party, saves you money and prevents having you feel exhausted and frazzled at your own party.
Follow old-fashioned holiday tradition by bringing out your best dishes, glassware and silverware for your party instead of buying disposable. This will save you money and send the message to your guests that they are important to you and that you want to treat them in a special way. Even though after-party cleanup will take a bit more time, you may be surprised to find that with everyone pitching in you have even more quality time together.
Be sure to take advantage of the many opportunities for free entertainment available during the holiday season. Most communities host Christmas caroling and musical programs that you can attend for free. Get together with friends and family members and carol your own neighborhood yourself or simply take a stroll or drive and enjoy seeing all the Christmas lights.
5. If You Must Use Credit, Be Cautious!
While it is best to avoid using credit altogether for the holiday season, sometimes this isn't possible. When you do use credit to pay for gifts, entertaining and other aspects of the holidays, be sure to plan carefully and act cautiously. Here are a few tips to help you make the wisest use of credit for the holidays.
- Decide exactly how much you wish to spend and choose one credit card to use for the holidays. This should be a card that has a very low annual percentage rate. Put all your other cards away in a sealed envelope, your safety deposit box or frozen in a block of ice if necessary and do not use them for holiday spending.
- Make a very precise list. Know exactly who you wish to buy for and how much you want to spend. Do your homework to find out what each person truly wants or needs and have a very good idea of exactly what you will purchase.
- Shop smart! Do your shopping online and/or go to the stores during a slow time of day. For example, you may wish to set aside some time while your kids are in school. Daytime is likely to be not quite so busy and hectic at the malls and in other shops, so you will be able to take more time and make wiser choices.
- Don't go shopping hungry! Take some time to eat a good meal before you go and be sure to take your own canteen or thermos of filtered water with you so that you won't have to purchase anything to drink while shopping. Being hungry or thirsty can easily make you overspend and buy on impulse. Avoid this by being satisfied before you set out.
- Plan your payments. Be sure that you have a plan in place for exactly how you will pay for your credit spending. Make sure that you have the money in your budget to make the payments and that you can have your holiday spending paid off within six months at maximum. The ideal would be to have it paid off within two or three months.
Remember The Real Reason For The Season
No matter what your religion or beliefs, the reason that underlies the celebration of the holiday season always boils down to a sense of thanks and gratitude coupled with generosity. The time building up to the holidays is a great time to go through your own belongings and gather together items that you might wish to donate to a needy cause.
Note: Taking stock in this way is a good reminder of just how much you already have and how little you may actually need!
This is an excellent family, neighborhood or workplace activity that can get everyone in the holiday spirit. At home, it serves as a way of beginning to prepare the house for holiday entertaining and merriment. You can start the season with a nice clean house, and every family member will have a very clear idea of just exactly what may be wanted as a very special holiday gift and a little less debt after Christmas!