How To Avoid Holiday Debt
How to Avoid Holiday Debt
The winter holidays can be an expensive time for many of us. Certainly most people are spending more than their budget allows, which is not a healthy way to manage money.A little planning can go a long way to avoiding this type of debt though. The first step is to start treating gift giving as an expense, the same way you treat your regular bills. If you know you're going to be spending the money, then plan for it.
Here are 3 tips to keep your money spending under control:
- Set a budget for gifts at the beginning of the year (account for birthdays, anniversaries, seasonal holidays) and include this expense in your budget.
- Open a savings account specifically dedicated to gifts.
- Set up an automatic payment to your "Gift Giving" savings account each week/month. The monthly amount should add up to the total annual budget you set for gifts. Many online banks allow you to open multiple accounts that you can name.
Create some new, more affordable gift-giving traditions.Do you need a gift?
Consider whether you and your loved ones really need to exchange gifts at all. Maybe you do for some people in your life, but can agree not to exchange with others?
Gestures & Homemade Gifts
If you do want to exchange gifts, could they be homemade? Could they be a gesture instead, like breakfast in bed, doing a task around the home you don't usually look after, finally cleaning up those boxes of junk that are driving your spouse nuts, making time to do something together like a hike or a stroll?
For older kids, experiences as gifts are always a great idea and it doubles as a family vacation.
For young kids, second-hand toys will be just as loved as brand new ones and you'll pay a fraction of the price. The truth is, it's more likely the parents, not the kids, who worry that a gift isn't brand new. Check out local buy & sell pages on social media for well priced toys that are often in nearly perfect condition.
If you insist on a gift, remember, it really is the thought that counts. Spending a large amount of money isn't a measure of how much you care. Instead, choose something within your budget that you think they'll enjoy, wrap it beautifully and perhaps include a heartwarming note.
This is a fun way for a large family or group of friends to manage gift giving. Draw names and each person has to buy just one gift. Set a maximum dollar amount that is affordable for everyone participating.
The Perfect New Year Resolution: Make A Gift Giving Budget
- Go ahead and make a list of all the gifts you give in a year.
- Consider where you can cut back and set a realistic budget - one that you can afford; not one that you feel obligated to adhere to.
- Total it up and break it down into a monthly payment.
- Remember, you should treat gifts like a regular expense and budget for them.
- Open up a savings account and start "paying" your gift giving bill each month by setting up an automatic payment to yourself. This way, you'll always have money set aside to pay for them.
Do you have budget-friendly gift giving ideas you can share with me? I'd love to hear them. Send them to me here.Wishing you and yours a wonderful, budget-friendly, holiday season.