It’s that time of year again — time to trim the tree, bake gingerbread cookies, sing Christmas carols and lose lots of money. WHAT? Are there ANY ways to avoid holiday debt?
For many, the holidays mark a challenge to stretch every last penny to buy presents, food, and decorations to create happy memories. There’s always that must-have toy that’s impossible to find on Black Friday, leaving you watching eBay like a hawk to outbid other parents.
The National Research Federation anticipates that holiday spending will reach $616.9 billion this year, and you can bet it won’t all be part of a well-thought-out budget. Overspending during the holidays can have serious financial consequences, but there are ways to avoid holiday debt without feeling like Ebenezer Scrooge.
1. Create a budget and stick to it.
Disciplined planning is the best way to avoid spending more than you can afford. A detailed budget will help you determine what’s important. That roast goose with plum pudding might impress your in-laws, but a regular turkey and mashed potatoes work just fine.
By avoiding the “bigger is better” mentality, your Christmas spending won’t leave you broke in the New Year.
2. Ask your family to pitch in.
I have a large extended family, with lots of nieces and nephews. When my wife and I invited everyone to celebrate the holidays at our new home, we went $1,000 over budget buying food to feed 40 people, plus a gift for every child. It put us in a tight spot for several months.
While we loved making our family happy, we asked everyone to pitch in the next year. Little things go a long way toward keeping you under budget — even a 12-pack of soda or a carton of eggnog.
You can also host a potluck if you can stand the possibility of having more than one fruitcake left over.
3. Pay with cash, not credit cards.
Credit card debt sticks with you long after the yuletide cheer has faded. You can minimize this by planning as early as January for holiday expenses at the end of the year.
Create a “holiday jar” to collect spare change in anticipation of your holiday shopping, or set aside a bit of your every paycheck to prepare.
4. Use every deal and discount you can find.
The Internet makes it easy to find free shipping and special deals. Use sites like RetailMeNot, Coupons.com, and Groupon, or peruse the Sunday paper for sales to help your dollars go further. Keep an eye out for “buy one, get one free” promotions and gift cards in exchange for in-store purchases.
See whether your favorite stores have apps that offer exclusive deals for buying online. Like Marv, the hapless burglar, says in “Home Alone 2,” “Every little bit helps.”
Having a happy and memorable holiday shouldn’t leave you penniless. As long as you stick to your budget, ask everyone to pitch in, save during the year, and take advantage of deals, you’ll come out with good memories — not debt.