Jobs have been going buh-bye this year and the economy is looking a little precarious. It might be a good idea to head into this holiday season with a solid plan so you don’t come out with a holiday hangover.
A more sensible approach to the holidays doesn’t mean you turn into a Grinch. It does mean thinking about what are you going to do differently this year that doesn’t involve simply walking into the mall, swiping your card and ticking names off your list. Getting through the holidays on a budget means you have to think hard about what you’ll give and to whom.
- You could make your gift. Homemade is full of love and doesn’t have to be hokey. How about giving your sister a coupon book for free babysitting? Or maybe your best friend needs a pet-sitter for her next vacation. Wouldn’t your mom love it if you weeded her garden or helped her clean out the garage? A gift of time and effort, with loads of love and laughter, is one of the best gifts going.
- Some families have already initiated the “gifts just for the little kids” approach to the holidays. The spirit of Christmas is to be together and celebrate. No one says those celebrations have to centre on the exchanging expensive presents. For those of whom pressies are still a big part of the experience, choose names. Then each person only has one gift responsibility. Some families also set a price limit to keep budgets in check.
- ‘Course, if you set a price limit for gifts you have to stick to it. There’s always some fool who, while espousing the benefits of a toned-down holiday, tries to show off. If you’re determined to stay on budget, be clear with your family: “People, money is tight this year, so we’re scaling back, focusing on the fun, okay?”
- Before tossing anything into your shopping cart ask yourself why you are buying it. Are you just fulfilling your duty to give? Are you showing off? Are you trying to keep up? Are you giving something you can afford that your friend, sister, son or partner will truly enjoy receiving? Your mom, brother or BFF aren’t going to be happier that you put yourself in financial stress rather than giving them something that might be slightly less and within your means, if they really love you. If they are judging you on the price of your present, then they don’t really love you and you shouldn’t be buying them ANYTHING.
- Resist the enticing offers to open up all those store credit cards you’ll be offered as you hit the stores. It may be tempting to get that 10% or 20% off your purchase for the day, but think for a minute: stores must be making a lot of money on interest and late fees in order to offer you that special deal. And if you’re the sucker who ends up carrying a balance, you’ll spend far more in interest than you saved on purchases. And, yes, opening and closing store cards can mess with your credit score.
- Skip the extended warranties too. Most are a rip off, so if you’re even considering it, calculate the cost as a percentage of the item you are buying. Remember, manufacturers’ warranties protect you, usually for up to a year, against any defect. And if you shop with the right (balance free) credit card your warranty can be extended to up to two years. Of the dozens and dozens of extended warranties I’ve been offered in my shopping life, there’s only one that I would have made money on!
- NO self-gifting while you’re shopping. The one-for-me-one-for-you approach is just an excuse to be self-indulgent. Did you know that more than three-quarters of us buy something for ourselves while shopping for others? Cut it out!
Wondering how you’re going to come up with the money to make holiday magic? One way to fund your gift giving is to sell stuff you no longer have a use for and use that money to go shopping. Since the money won’t be coming out of cash flow or going on your credit card, you won’t have to give anything up in order to give pressies. Just make sure you limit your shopping budget to the funds you raise.