The holidays are a time of fun and celebration, but for some, they can also be the beginning of a cycle of debt. It doesn’t have to be that way, though, because you don’t have to rely on credit cards or loans to make precious memories with your loved ones. Here are some tips to help you stay debt free this holiday season.
Create a holiday budget
Most people rack up holiday debt because they don’t know how much they can actually afford to spend, so it’s a good idea to start by creating a holiday budget.
Begin by listing all your anticipated expenses, including cards, gifts, and special meals. Then, compare the figure you arrive at with how much you have left to spend after paying your regular bills. If you find that you’ve budgeted too little or too much for the holidays, come up with a new spending plan. Don’t forget to budget for hidden expenses like a higher electric bill, wrapping paper, and shipping costs.
It’s not as hard as you might think to create your holiday budget. You can use:
- Pen and paper: You don’t need anything fancy to create a budget. A good ol’ pen and paper will do the trick. Just make sure you keep the final version on your fridge or somewhere you’ll be able to easily access and view it.
- Spreadsheets: A Microsoft Excel or Google Sheets spreadsheet is another great way to make and track your budget. You can use a budget template to help you get started.
- Apps: There are plenty of apps that are designed to help you budget. For example, take a look at Mint, EveryDollar, and Clarity Money.
Get creative with gifts
It can be tempting to spoil your loved ones with big-ticket items. But if expensive presents don’t fit into that smart holiday budget you created, rather than putting presents on your credit card, try getting more creative with your gifts. Consider homemade options, or those that involve your time and skill. Sometimes, the most appreciated gifts are the ones that cost the least. Here are some ideas to get your creative juices flowing:
- Cooking lessons: If you’re a good cook, share your tips and tricks through private cooking lessons in person or by Zoom. Come up with a meal they’ll love and teach them how to prepare it to perfection.
- Closet organization: Are you an organizing pro with an eye for style? If so, help a friend or family member transform their messy, unkempt closet into a tidy, organized place they will love every day.
- Monthly cookie delivery: Cookie delivery services are pricey, so gift your own. Prepare fresh cookies and deliver them to your loved ones once a month. Wouldn’t homemade cookies delivered to your door brighten your day, especially during a lockdown?
- Photo collage: Most people love to look at old photos. Print out a bunch of photos and create a collage of them to gift to a loved one. You can put them together in a visually appealing way on a piece of construction paper, a canvas, or even digitally.
Shop over time
You may be more likely to overspend if you procrastinate on your holiday shopping, so it can be a money- saving strategy to shop over time. After you make a list of what you’d like to buy, look for good deals and purchase a few gifts each week. Gradually and thoughtfully completing your holiday shopping list can help you spread out your purchases, save up for pricier gifts, and stay debt free.
Recommend a gift exchange
A gift exchange like a Secret Santa or a white elephant is a great way to have fun and save money this holiday season. You won’t have to buy a gift for everyone on your list, instead, you’ll only have one person to buy for. If you like the idea of a gift exchange, don’t be afraid to recommend it to your loved ones. You never know, it could turn into a new tradition that everyone enjoys.
Set limits on gifts
It can feel unfair when you buy someone a gift that’s worth a few hundred dollars and later find out the gift they bought you cost $20. Instead, talk with family and friends and agree on a spending limit for gifts. This way you won’t feel pressured to buy expensive items and can easily budget for your gifts in advance.
Get a seasonal job
If you’d like to earn some extra cash during the holidays, consider a seasonal job. Call centers are often in need of remote customer service representatives to help them through the holiday rush. Delivery and food services may also need an extra set of hands during the holiday season. A seasonal job may be just what you need to enjoy to stay debt free during the holidays, and after.
Hold off on gifts for yourself
You may want to treat yourself to something special during the holidays, but if you wait until the holidays are over to buy that gadget or handbag, you’ll be more likely to hit your budget. Waiting until after Christmas for example, can allow you to use gift cards or exchange an unwanted gift to purchase your gift of choice. In addition, you might be able to get what you’re looking for at a discount in a post-holiday sale.
Don’t fall for holiday sales
It may seem counterintuitive, but holiday sales can actually be a debt trap. You may end up buying things simply because they are on sale, not because it is what you really want or need for your gift list. If an item you had planned to buy for yourself or someone else goes on sale then of course, take advantage of it. If it wasn’t on your holiday shopping list, move on.
Take control of your debt this holiday season
If you’re serious about staying debt free this holiday season and beyond, we can help. Our free How to Manage Debt guide is a great way to learn about your debt relief options. Once you read it, you’ll have a better idea of how to take control of your money and move toward a more secure financial future.