The winter holidays are the most expensive time of year, by a large margin. Consumers spend $630.7 billion for the winter holidays, compared to just $21.6 for the next most expensive holiday (Mother’s Day). Whether you have kids or not, this holiday season is the most likely time of year to take on debt. So, you have to budget carefully if you want to avoid high interest credit card charges. Otherwise, you could be paying off your holiday purchases by the time next Christmas rolls around. The articles in this section can help you craft an effective holiday budget, avoid Christmas spending traps and save money. So, don’t let holiday debt take over your budget and leave you in a bind after the New Year! Act now to make your holiday spending plan, and if you end up charging and need help,
10 Tips for Avoiding High Interest Rate Holiday Credit Card Debt
#1: Make your list, then check it twice to divide gifts into groups
If you’re the kind of person that likes to buy gifts for everyone you’ve ever met, it’s probably pretty hard on your budget. You should really only buy large, unique gifts for immediate family. And immediate family should only get a few reasonable gifts or one big present. If you buy several big gifts for each child, plus your spouse and relatives, it’s a recipe for debt.
So, write out who you need to buy gifts for and what you plan to get them. Then see if you really need to gift all those people. Be realistic – in other words, don’t take off names if you know you’ll eventually cave and get them something last minute. However, leaving people on your list doesn’t mean you need to go overboard. A small gift just to show you’re thinking about them will suffice for most people. This can include:
- Non-immediate family
- Bosses and coworkers
- Teachers and classmates of your kids
- Service professionals you want to gift
For these groups of people, you can either get small items or make bulk gift baskets for them. Just buy inexpensive baskets at a craft store, fill them with items you buy in bulk at a discount store and wrap the baskets. It’s easy and cost effective.
#2: Don’t shop in ways that lead to overspending
There are times when shopping is worse for your budget because you’re more likely to overspend. This includes everything from shopping hungry or tired, to shopping with friends and browsing big holiday window displays. Any of these times make it tougher to stay on budget. When you’re tired or hungry or stressed, you’re willing to buy anything to get out of the store. Shopping with friends drives everyone to overspend and holiday displays are designed to tempt you into impulse purchases.
Always shop with your list and stick to your plan. And don’t think that holiday overspending only occurs in the store. Recommended items, add-on accessories and online advertising can be just as bad for your budget.
#3: Your budget should include more than just gifts
A good holiday budget covers everything:
- Food for big holiday meals or to feed visiting guests
- Travel and accommodations if you’re heading out
- Postage and shipping costs
- Holiday clothing
- Photography sessions for family holiday cards if you do them professionally
Basically, you want your budget to capture the total cost of the holidays. It should include everything you can think of so it’s as accurate as possible. This way, you can avoid overspending effectively.
#4: Don’t go overboard with decorations
Ignore what your neighbor is doing and don’t make decorating a competition. Keep your decorations within reason and aim not to buy anything new this year. Go to the trouble of testing lights and switching out bulbs instead of buying new strings because it’s easier.
If you’re tired of your old stuff, consider setting up a decoration swap with family or friends. You exchange decorations with each other so everyone can have a fresh yard. Just make sure to agree in advance about what to do if items get damaged – it happens.
You should also consider whether it would be more cost effective to get a fake tree. The expense is roughly the same the year that you buy it. However, you only incur that cost once instead of year after year.
#5: Get crafty (and include your kids)
Craft projects are a great way to reduce holiday costs and keep your kids busy during this stressful time of year. You and/or your kids can do craft projects to create ornaments and decorations. They can also help you set up gifts baskets or decorate handmade gifts that tend to be more meaningful for giftees like grandparents.
Just be sure to start any craft projects early to make sure they go well. If you create a tester – test gift basket, test batch of cookies, test decorated flower pot for your grandmother, etc. – then you have time to mess up and fix it without getting stressed.
#6: Shop early to take advantage of free shipping
Many retailers offer free ground shipping if you order before a certain date. Know what that date is for each retailer and shop well ahead of it. Air shipping charges get extremely expensive, so don’t procrastinate or you could more than triple the cost of your gift.
If you plan to get the packages to your home, you can also do in-store pick up. Lines tend to be shorter since you often deal directly with customer service. And the earlier you order, the easier this is. So, use any option available to keep the transport of stuff you order at zero.
#7: Sign up for emails, then ignore most of them
Most retailers now offer exclusive discounts and deals to people who sign up for their newsletter. For other stores, you have to follow them on certain social networks. Whatever the case, use these exclusive offers to your advantage.
However, you don’t want to get pulled into impulse purchases by emails offering big discounts on items you don’t need. So, keep your list handy review emails briefly and delete them if they’re not related to the items on your list. If you’re easily tempted, just look at subject lines. If your favorite department store offers 30% of jewelry and you’re not buying anything glittery for the winter holidays, then just delete it.
#8: Buy last-minute gifts early, then keep them on hand
Whether you grab some digital picture frames or candles or spa products, last minute gifts are best purchased well ahead of time. You also should purchase them in bulk, preferably when they’re on sale for the biggest cost savings. If you buy a bunch of last minute general items to give away, you can avoid feeling awkward if someone gifts you and you aren’t expecting it. (Keep a few in your car for those times when you really need them.)
#9: Home stays are cheaper than hotels, but offer to pitch in
If you’re planning on travelling for the winter holidays, try to avoid hotels, particularly if you’re headed for a major urban area like New York. The rooms will be marked up pretty much everywhere you look. Instead try working it out so you stay with a relative or a friend. That way, the only travel cost you incur is the tickets or fuel costs to drive there.
If you plan on staying with someone for the holidays, do the proper thing and offer to pitch in some money for groceries and such. This will go a long way to ensuring your invited back and welcome next year, too. Oh, and if you need someone to take care of pets or plants or your home while you’re gone, find a teen in your neighborhood to look after things. It’s much cheaper than a professional service.
#10: Find more ways to save right after Christmas
There are several things you can do to save money right after the holidays, too. For some of them, you need to plan ahead of time to pull them off:
- Always include gift receipts with purchases and ask anyone gifting you to do the same. This makes for easier returns and exchanges
- You also want to check retailers for price matching. This is where the store will discount you or give you a store credit for an item that goes on sale after the holidays. You basically make up the holiday markups by doing this.
- Cash in gift cards – either use them at places where you need or want to buy something or find a gift card exchange online. Gift card exchanges allow you to trade in cards for places that you don’t like or don’t shop. Using or exchanging gift cards promptly keeps you from running across loads of unused cards the next time you clean out your junk drawer.