Thursday, January 13, 2011

How to Avoid Holiday Debt

Why would any blogger post an article about holiday debt and spending in January instead of just before the holidays? I happen to think that January is the right time to start thinking about it. Make a game plan, and implement it throughout the year. That's what we did last year, and it helped us immensely.

  1. Know what you're willing to spend overall. Having a budget will help fight the temptation to overspend. Write down a dollar amount that you are willing to spend at most for each person.
  2. Save for your holiday spending throughout the year, starting in January. You already have a rough idea of how much the holidays cost you (it was only last month). If you plan on spending a total amount of $1200 including gifts, cards, wrapping, holidays meals, alcohol and the like, divide that number by 12 to give you a monthly amount that you have to set aside. Making it an auto-deduction from your chequing to a specified savings account is a super easy way to save.
  3.  Make a list of who you must buy for. Have another list of who you may need to buy for. If you have an idea of a possible gift. write the item down beside that person's name, along with the approximate dollar amount for that gift. Make sure that it is within the dollar limit you have set in #1.
  4. Don't go shopping without a plan. Know what stores you'll be going to, and for what items. Have a list of alternative gift ideas should the item you would like to purchase is unavailable.
  5. Set specific dollar amount limits for each area of holiday spending: gifts, meals, baking supplies, alcohol, gift wrapping & cards, travel, etc. Then make sure you stick to those budget amounts!
  6. Use cash only! If you have saved up loyalty reward points toward free groceries, at the drugstore, or other programs, now is a good time to use them. Do NOT put anything on credit if you cannot pay the balance in full right away.
  7. Think frugal. Can you make something that the recipient would like? Maybe you could make cards, recycle last year's cards into gift tags for this years. Maybe you could give a gift certificate for child-minding, or something else you could do for them. Gifts in a jar, handmade soaps and other consumable items are immensely popular.
  8. Pick up things throughout the year when attending yard sales, or if you find something unusual at the dollar store, or a retail store sale. Put them in a specified bin or on a closet shelf. You'll be ahead of the game, and maybe finish your holiday shopping early.

  9. Talk to people ahead of time about the holiday. Let them know you are wanting to do something different this year. Try to agree on a secret Santa exchange, or to just not buying gifts for adults. Opening the lines of communication early will be beneficial to giving all involved enough time to find an alternative solution to over-consumerism of the holidays.

Cut back. Pare down. Try something new, instead of just buying stuff. Make this the year you only buy Canadian made products, or the year you vow to only give handcrafted items that are useful. Make memories instead of just giving stuff. Open your mind to the possibilities. Search the Internet.There are literally thousands of great ideas on the web about reducing consumerism over the holidays.

Leave me your thoughts on how to make the holidays in 2011 different than you've ever had before.

1 comment:

  1. This year I'm going to suggest that hubby's family organize a "Family Wish List" like this one:
    There are 11 adults and 7 children in hubby's side of the family - that's a lot of people to try and buy meaningful gifts for. At least if you had an idea of what they were interested in getting, it might help cut down on useless, unwanted gifts.