When it comes to the holidays, there is a pretty obvious elephant in the room… spending.
We all know that our focus should be on giving rather than receiving, but it’s difficult to wrap our minds around this concept as it relates to money, especially when money is tight.
For that very reason, many of us turn to credit as a way to source giving gifts to those we love, thinking we’ll be able to “catch up” once the holidays are over.
While credit can be an effective way to build your financial report card when used responsibly, debt is a whole other story.
My best suggestion?
Stay out of debt this holiday season with these simple tips.
Our First Christmas
I’ve mentioned before that money was tight (or at least tighter) during our first year of marriage.
We were just getting on our feet financially and had set goals then to pay off several of our debts, so we had a limited spending budget.
As Christmas approached, we wanted to be able to share the season with our family and offer gifts to those we loved but what we didn’t want was to add any more debt to our financial load.
To meet both of these goals, I came up with a few ways that we could purchase gifts without going into holiday debt.
And, you know what?
We still use these practices today.
Tips for Staying Out of Debt during the Holidays
Many of our holiday practices mimic that of our regular budgeting practices but are just a little more focused.
It’s just so easy to forget about budgeting when we’re focused on giving.
By following these practices, we are able to keep our spending in check and avoid the holiday debt burden.
1. Make a List
You probably get tired of hearing me suggest planning, but honestly, planning is one of the biggest elements of planning.
The first step of creating and sticking to your holiday budget is creating a list of those individuals you plan to buy for.
You may even want to break it down into a list of who you want to give actual gifts (such as family) and people you may just do goodies for (like your neighbors).
2. Set Your Budget
Once you’ve made your list, it’s time to set your budget.
Consider how many people you have to buy for and how much you have to spend. Let’s say you set aside an extra $250 for Christmas spending.
If you want to buy for 10 people, then you have $25 per person.
Fill in your numbers and decide on a holiday spending limit altogether and for each person.
3. Shop with Cash
The easiest way to stay out of debt over Christmas is by shopping with cash.
Avoid the credit card altogether and use the green stuff.
When using cash to make your purchases, you won’t be tempted to overspend because you’ll only have enough cash to cover your budgeted amount.
4. Look for Sales
One way we make the most of our Christmas budget is shopping early and looking for sales.
One option that I’m considering using this year is a $10 off coupon I received in the mail from Target.
It’s a coupon to get $10 off of a purchase of $100, which is a discount of 10% when you look at it this way.
You know there are all kinds of sales going on over the holidays, so take advantage of them and stretch your budget. (Be careful, though, don’t just buy it because it’s on sale.)
5. DIY or Give Your Time
Remember, giving a handmade gift or even just giving of your time is just as much of a gift as spending a great deal of money.
In fact, some of the best gifts I’ve gotten have been homemade. One year my brother and sister-in-law made us candles for Christmas.
They were beautiful and smelled great, and the heart that went into them was evident.
If you don’t have the budget to give store-bought gifts, consider making items to give as gifts or even just share time together over the holiday season.
The holiday season is one of the easiest times to fall into debt.
These practices helped us avoid getting into any more debt and actually allowed us to pay off all of our credit card debt in less than a year. If you’re willing to stick to them, they’ll help you too!
What ways are you avoiding debt this Christmas?
Will you be making any homemade gifts to give?