It's Better To Give Than To Receive... That is, Until You Receive The Credit Card Bill

Smart Tips for Achieving a Debt-Free Holiday

A car jam-packed full of gifts; holiday parties; traveling cross-country to visit loved ones – consumers spend more money in the three months before New Year’s than any other time of the year. In fact, retailers often make about half of their annual profit during this time, according to the National Retail Merchants’ Association.

Unfortunately, much of the buying will be done on credit. Many people get so carried away during the holiday spending season that they can’t dig themselves out for months, or even years. With the holidays quickly nearing, now is the time to think about how you will pay for gifts, decorations and everything that comes with the season.

Spending Management Expert, Steven B. Smith, recommends the following tips to achieving a debt-free holiday.

• Create a holiday spending plan NOW. Use an envelope-based budgeting system to allocate funds for every holiday expense. Assign each expense (gifts, entertaining, home decorations, etc.) an envelope either using a cash-based envelope system or an online system like Mvelopes® Personal. Determine the amount you can afford to spend and write it on the envelope. If you must go over the amount allocated, you are faced with the choice to take funds from another envelope or rethink that expense.

• Don’t wander off track. Emotions sometimes get in the way of good judgment when shopping for loved ones and friends. While it’s terrific you want to give only the best, stick with the amount allocated to each “envelope.”

• Use credit cards wisely. There is no quicker way to ruin your holiday spirit than to realize you have to pay for all those purchases over the next several months or longer. Credit cards should only be used when you know that you can fully pay them off during the next month, with money that is already set aside for this purpose. Otherwise, when you calculate the finance charges, you practically double the cost of each item.

• Get creative with gift giving. Many times, the best gifts are the ones that require little or no money. Whether it’s baked goods, a grandchild’s one-of-a-kind art piece or an IOU certificate for a house cleaning, there are many opportunities to save money during the holidays without sacrificing anyone on your list.

• Shop for bargains, and shop early. The Internet has lots of great deals. And many of the best deals to be had in the stores are before the shopping season kicks off.

When putting together your shopping list and holiday spending plan, consider that you don’t need to spend a lot to show someone you care. Consider these tips for some extra savings:

• Set holiday spending budgets with family and close friends with whom you are exchanging gifts, or discuss a name exchange to help eliminate needless overspending.

• Homemade gifts and/or baked goods make great hostess gifts, office gifts, or gifts for casual friends. But no one has time for hand embroidered holiday napkins, or personalized gingerbread cookies, on the 20 th of December. No matter what you are making, baking or creating- get started early so you can enjoy December!

• Start early on your shopping list to avoid the last minute panic attack that often has us all overspending our budgets. If you decide early what you want to get each person on your list, you can take the time to shop for a good price on the item rather than making the close-at-hand, but all-too-expensive choice.

• If shopping online or by catalog, be sure to shop early enough to use economical shipping methods. You don’t want to pay pricey overnight shipping costs just to ensure gifts arrive by Christmas Eve.

Family and friends are often spread out around the state, country or even world. This year don’t spend your whole holiday budget on the costs of shipping your gifts to those far removed family members.

• Consider having gifts delivered straight to the recipient when shopping online or via a catalog. Most sites and catalogs will usually gift wrap, send a card and a gift receipt. Saves you the time, and money, of another trip to the post office.

• When shipping gifts to far away family and friends, be sure to send them early enough to use economical shipping methods. Shipping a 15-pound box over night on December 23 rd isn’t economical.

• For gifts that need to be shipped, consider the size and weight of an item when you are deciding what to purchase. A gift card for the amount of the Turkey Roaster your Mother wants, with a short personal note, is just as thoughtful as the Roaster itself, and it doesn’t cost a small fortune to ship.

The holidays simply won’t be as enjoyable for you, if you are running around at the last minute, running up your credit card bills, worrying about how to pay for all these holiday expenses, and trying to get the ‘perfect’ gift for each and every person that you know. To help you keep your sanity, don’t forget to take some time out for yourself. Alleviate the holiday stress that often leads to over extending yourself, your wallet, or even your family, by scheduling some ‘down time’ for yourself. Take a 15-minute break each day and simply soak in the tub, go for a walk, or write a personal holiday note to a close friend whom you know is equally as stressed as you. This will help clear your mind and help you make more informed decisions about your holiday spending and your holiday time.

Don’t let the holidays season pass without getting into the spirit of the season… giving. However, that doesn’t mean running up even larger credit card bills! Charity can definitely begin at home! Clean out those closets and drawers of items you don’t wear or use anymore, and donate them to a shelter, salvation army, etc. Your family’s gently used clothes, coats, blankets, and toys could be someone else’s perfect Christmas gift!