Feeling more like Scrooge than Santa as you begin prepping for the holiday season? You're not alone. With consumer debt rising to unprecedented heights, more and more people are readying themselves for a holiday credit crunch this December. Here are a handful of ways to celebrate the season on a budget...
1) Set your spending limit - and stick to it
Worried you won't be able to control your spending habits this holiday season? Consider planning your purchases rather than running willy-nilly through your local mall. Write a list of people you want to give gifts to and put a dollar amount next to each name. This exercise will help you to understand just how much you're spending and on whom. If your budget looks too high, make some revisions. If it's too low (lucky you!), spoil that special someone with a little extra holiday cheer. While you don't have to be a stickler for spending the exact amount that you've estimated, try not to exceed your limit on too many items. Your budget will thank you come January.
2) Go for one big gift rather than multiple small ones
Parents often go overboard buying tons of small, insignificant gifts for their children. Yes, this means there's more under the tree come Christmas morning, but it also means there's less cash in your wallet (and more toys to tidy up). Instead of wasting money on a lot of little gifts that your child probably won't appreciate in a couple weeks time, consider investing in two or three significant gifts. Not only will this end up saving you money, but it will also help teach your children that sometimes less truly is more.
3) Give a gift that keeps on giving
Sure, we all have monthly magazine subscriptions we don't read, but what about online subscriptions? Many major newspapers are going digital with a low monthly fee, allowing you to read up on top stories wherever you are and without the bulk. Not only are these subscriptions affordable, they also help to extend the gift-giving goodness throughout the entire year. Consider other online alternatives as well, like gift cards for iTunes, Amazon, and Etsy purchases.
4) Be smart about holiday parties
Being a social butterfly during the holidays can be fun, but floating from one party to the next can also get costly. Picking up the bar tab after a night of holiday cocktails and carousing can leave you feeling anything but festive. When it comes time to make the rounds this year, be selective. Choose parties that are hosted by close friends and family members and consider skipping out on those that involve co-workers or acquaintances.
5) Keep your credit card in the freezer
Purchasing presents on credit might seem like a smart idea now, but what about six months from now when you're still trying to pay down the debt? Paying unnecessary interest on gifts is just silly and can effectively double the cost of what you actually paid over time. Instead, stick to a cash diet when shopping at local stores.
If you're going to order gifts online and need to charge to a credit card, make sure your budget can handle the added expense and that you have savings set aside to pay off the balance. Resist impulse buys both online and offline to keep your spending from spinning out of control.
6) Get crafty
Christmas is a great time to break out the glue gun and flex your creativity. Since the inception of Etsy, crafting is downright cool and a heck of a lot of fun! Kick off the holiday season with a crafting party to create paper chains, personalized cards, and signature gifts. In this day of conspicuous consumption, a little something home-made or home-baked is the welcome exception, not the norm.
7) Don't forget about reward points
When was the last time you checked the balance on those reward credit cards in your wallet? You could be sitting on some free merchandise! Cash in your rewards online to buy items that you can gift, or trade in your points for store credit before you start your holiday shopping. Just make sure to do it early, as most merchandise or gift certificates take 2-3 weeks to arrive.
Spreading the joy doesn't need to blow your budget
Just because the festive inventory and decor has inundated the stores doesn't mean you need to immediately start spending more. Instead, manage your spending by planning ahead and avoiding unnecessary purchases. You can make smart spending decisions while still spreading the joy of giving.
GoldenGirlFinance.ca is a free personal finance and education site for women.