The season to celebrate the Prince of Peace is anything but peaceful for many of us. Hijacked by our culture of consumerism, we’ll spend far too much of our time shopping for others with money we do not have.
According to a recent survey conducted by Experian Consumer Services, shoppers anticipate spending nearly $800 this year for gifts alone, with forty-nine percent of consumers planning to use credit for at least some of their purchases. Worse yet, the survey finds that nearly 41% of Americans feel obligated to purchase gifts that they can not afford.
In the hustle and bustle of holiday shopping it’s easy to loose track of how much we’re spending. That’s why the first step to avoiding those January credit card blues is creating a holiday budget.
As Rod Griffin, director of Public Education at Experian, warns, “The holidays can prove to be a challenging time for many consumers trying to manage their finances. Credit is a useful tool if it is used wisely, but it’s best to create a budget and determine how much one can afford using credit so there are not overwhelming bills to pay in the New Year.”
1. Firmly decide on an affordable dollar amount ahead of time
Make a list of people on your gift giving list and assign a dollar value to each recipient. If you don’t have enough money for everyone on your list, make the hard decision now to cut someone off your list.
Take your list with you as you shop in order to keep track of your spending, and remember, if you spend more on one person than you intended to, you’ll have to spend less on someone else.
2. Honesty is the best policy
Creating and sticking to a strict budget is crucial, but there are other things you can do to keep from busting the bank or racking up credit card debt. Sometimes avoiding holiday financial trouble is as simple as having an honest conversation with your extended family.
Be up front and let them know you simply don’t have a lot of money for gift giving. You’ll be surprised. Your sister-in-law may be just as relieved as you are at the prospect of not having to spend so much money on gift giving.
3. Group gifting is good for the family
Alternatively, consider purchasing a “family gift” for your brother’s family instead of individual presents. It could be something as simple as a yearly Netflix subscription that their entire family can enjoy.
For large extended family gatherings, it might make sense to create a gift exchange where names are drawn out of a hat ahead of time. Each family member would only be responsible for purchasing a gift for the person whose name they drew from the hat.
4. Teach kids to prioritize
While you may adore your kids more than anything in the world, you don’t need to purchase them every toy or gadget under the sun. Require your children to create a Christmas wish list. Then have them work to pare down the list to the three or four items items they covet the most.
This process, in and of itself, will teach them lessons in prioritizing “wants” and help them develop an increased sense of gratitude, as they’ll appreciate the gifts they do receive all the more.
5. It’s the thought that counts
Don’t forget, it’s the thought that counts. Often, the best presents can’t be bought from a store. A personalized photo album documenting the lives of the kids over the past year could be the best present a grandparent could ever desire. A heart felt love letter to your spouse may be the gift they cherish forever.
Our society makes it all too easy to become caught up in the commercialization of Christmas. Remembering the true reason for the season provides reassurance that there’s no need to overextend ourselves, especially when we’re trying to be good financial stewards of our money.
BMWK, how do you prevent the holidays from derailing your finances?