3 Tips To Avoid The Holiday Debt Hangover This Year
It happens every year. We try to be smart with our spending, but we ultimately end up spending more money than we should have for the holidays. Last year, the average American racked up over $1,000 of additional debt from holiday shopping. This is not $1,000 total, it is $1,000 or more of addtional debt on top of any current credit card debt. The worst part, many are still trying to pay it off! If this is you or someone you know, it is time for this cycle to stop.
1) Tighten Up The Budget For Other Areas Of Spending
Your budget should be the main tool you are using to manage your money already. However, sticking to a budget can be difficult on its own. When you combine it with the pressure of spending during the holidays, it becomes increasingly difficult. In an ideal world, you would be able to keep to a strict budget and spend exactly what you want on Christmas gifts. However, this is not an ideal world. Gifts are more expensive than we think, and life happens with regards to your normal budget. One of the best things you can do would be to decrease some of your other categorized spending such as eating out, entertainment, coffee, etc. Decreasing some of these items from your monthly budget during the holiday season can help counteract some of the additional spending.
2) Cut Back The Spending List
It is great that you want to buy gifts for so many of your friends, family, and co-workers. However, this is not always the most realistic or logical thing to do. When you have a list of 30 people at $25 a piece, you are going to spend around $750. Consider cutting the list down and scaling back the gifts. One simple way would be to do a cheaper card with a $5 gift card for coffee given to co-workers. It is a sweet sentiment to at least show someone you are thinking of them. For example, if this was 15/30 people you were buying for, you just saved around $300. Another important thing to understand is who exactly you actually SHOULD buy gifts for. I am not saying don’t be generous, rather understand who are the most important people in your life who you should be spending money on.
3) Consider Making Gifts Or Selling Things
Gifts to those you care about should not be about how much you spend. Rather, it should be tied to the meaning behind it and letting them know you were thinking about them. If you are creative, you could make gifts for people instead of buying them. If you choose this route, you may already have the materials to make something or can buy the materials in bulk and save hundreds of dollars. The other option you may consider would be to sell things for extra cash. Now, this is an idea which does not have to only be around the holidays, but it certainly will help around this time. Consider rummaging through your things and see what you have that you could sell. In some cases, you may be able to make all the money you need for the holidays this year.
Remember, this season is not about how much we spend or the perfect gift for a person. It should mainly be about remembering our friends and families. For many others, this includes remembering the religious reasons for this season of joy. Regardless of what you choose to believe and do, please be smart with your money. January 1st will be here faster than you think. When it does come, you do not want to be regretting your decisions during the holidays and all of the money you spent.