Beating Broke

Personal Finance from the Broke Perspective

It’s Not Too Early to Make Your Holiday Spending Plan

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Presents and ornaments in front of a Christmas tree

Did you overspend last holiday season? When January rolled around, did you face credit card debt with no real plan to pay it off? If so, don’t despair—you’re not alone. My husband and I had one holiday season like that, and we quickly learned to make a holiday spending plan that we stuck to.

If you want to rein in your spending, now is the time to make that plan and talk to your loved ones. Although the conversation might be awkward, you’ll feel much better in January 2024 when you’re not facing new debt from the holidays.

How to Make Your Holiday Spending Plan

Christmas is about ten weeks away, so don’t waste time implementing a plan.

Decide How Much You Have to Spend

The first step is deciding how much you have to spend on gifts. If you only have 100 dollars to spend on gifts this year, that’s all you have, and you’ll need to plan how to maximize that money or make more money before Christmas.

Once you have your holiday spending plan, you can find creative ways to stretch those dollars.

Make Some Gifts

If money is tight, plan to make some gifts. If you’d like to give a gift to your mail person and your child’s teacher, but you don’t have cash, consider making something like a yummy dessert or a canning jar filled with the ingredients for bean soup, cookies, or brownies.

Make a Plan for Extended Family

Likewise, if your extended family typically exchanges gifts, now is the time to talk to them about that tradition. Some families decide not to give gifts to the adults, but if you still want a gift exchange, consider drawing names and putting a price limit on the presents.

I come from a large extended family (I have over 30 cousins on my mom’s side), so we would draw names every holiday. Each person was responsible for only one gift, and the price limit was 10 dollars. Talk with your family about a cap on the gifts at an amount everyone in the family is comfortable with.

Have a Talk with Your Immediate Family about Fewer Gifts

Once you determine how to handle gifts for the outsiders in your life and your extended family, it’s time to look at your immediate family. If your kids are older, reducing their gifts may be difficult. Instead, you may need to tell them that you must cut back this year and why.

If the kids are still young, this is the perfect time to start a tradition of only giving a few gifts. Many families give four gifts—something to wear, something to read, something you need, and something you want. I haven’t gone that minimalistic, but over the years, we have gradually reduced the number of presents the kids receive.

If you don’t want to cut down on the number of gifts your kids receive, remember, there’s no shame in buying secondhand gifts. You can often find items in a secondhand store that haven’t been opened yet, but their price is much lower than retail.

Final Thoughts

Each of us would like to give our family members everything they want for the holidays, but that isn’t realistic. Instead, develop a holiday spending plan, then make a Christmas buying plan based on your budget. Although you might give fewer gifts, you’ll be happy to be in the black in January rather than facing credit card bills.

Read More

9 Ways to Get Your Child a Christmas Gift If You Can’t Afford to Buy One

What Christmas Expectations Are You Setting for Your Children?

How I Plan to Have a Low-Cost Christmas

Restrain Holiday Eating and Spending for a Happier New Year

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Have you been in this situation before?

You want to start a diet and shed a few pounds, but you decide, since it’s November already, you should just wait until after the holidays.  You tell yourself you’ll have a fresh start January 1st.  New year, new life, all that.

This plan may sound good to you, but since you keep thinking about the diet you’re going to start in January, you indulge more than you normally would over the holidays and gain 10 pounds.  Now, you have an even bigger job ahead of you come January 1st.

Restrain Holiday spending and eatingIf you had instead started your new eating plan at the beginning of the holiday season, you would have had better control over your eating.  You likely wouldn’t have gained weight.  If you were doing great and were motivated, you may have even lost weight, but let’s be honest—even remaining the same weight during the holidays is an accomplishment.

We’re in November, which is when most people are at risk of two negatives—eating too much and spending too much.

Just like the decision to lose weight, many people may decide to start focusing on managing their money better after the holidays.  After all, there are so many presents to buy and parties to host.  Getting on a budget isn’t possible during the holidays, they think.  And then, because they’re not keeping an eye on their finances, they spend lavishly and find themselves facing an exorbitant credit card bill that they can’t pay in full.

Sound familiar?

Why not make this year different?

Yes, the holidays are right around the corner, but it’s not too late to keep your finances in check.  Here are some simple strategies:

Don’t give gifts to everyone.  If you don’t have a lot of money saved up for gifts, don’t go into debt to buy them.  Think about it.  Do you remember what gifts you received for Christmas last year?  Do you remember who gave them to you?

Yeah, I thought so.

I remember only one gift from last Christmas, even though I got several.

Give a gift that you can pay for later.  I love this strategy!  If you don’t have a lot of money for holiday gifts but still want to give something, consider offering a gift at a later date.  For instance, you could offer a close friend a present of dinner and a movie at a time of her choosing.  Maybe she decides in March that she’d like to take you up on the offer.  You’ve had three months to save the money for that gift.

Don’t give in to peer pressure.  There is an enormous amount of peer pressure during the holiday season to go to parties, bring food, buy gifts for everyone. . .It’s okay to step off this spendthrift merry-go-round and simply say no.  You don’t have to go to every party.  You don’t have to buy a present for everyone you have contact with in your life.

Just say no.

The next four to six weeks can have a significant impact on the first few months of 2016.

Are you going to indulge occasionally in sweet treats but mostly eat healthy, or are you going to let loose and gain 10 pounds?

Are you going to be financially responsible and only give gifts that you have the means to give, or are you going to charge everything and create a hole that will take you three or four months to dig out of, if not more?

Haven’t you had enough of overindulgent holidays?  Wouldn’t you like to start 2016 with a truly fresh start and no extra weight or bills?

 

 

 

 

Have a Holiday Spending Plan: Don’t Dread January

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Its beginning to feel a lot like christmasHoliday shopping is in full swing now, and you may be feeling the financial pressure.  Shane recently quit his job and is working on a tight holiday budget.  My husband and I are in the midst of being gazelle intense, so we don’t have much extra money for gifts.  Yet even though we don’t have much money to spend this holiday season, I feel great about what we are giving because we are not overspending.  We can truly afford what we are giving.  Instead of overspending, we are empowering ourselves by spending exactly what we are able to spend.  Follow these tips to rein in your holiday purchases this season:

-Freeze the credit cards.

Literally.  Put them in water and freeze them.  Better yet, put them in peanut butter as we did.  Vow not to use your credit cards this month.  There is nothing worse than opening your credit card statement and staring at the large number you now owe.  The presents have been opened, the holiday is over, but you still owe for the holidays.  If, instead, you put the credit cards away, you have nothing to dread come January.

 

 

-Set a budget and fund it with cash.

Determine exactly how much you have to spend and withdraw that money from your bank account.  Pay for every purchase with cash.  Feel the pain as you part from the cash.  Acknowledge what you are spending, and feel empowered that you are sticking to your budget.
If you want to shop online, get a debit card.  Just avoid using credit cards.

-Shop the bargains

There will be plenty of deals to come this holiday season.  Stay focused on the deals and only buy items you can get on sale.  Take advantage of buy one get one free sales such as buy one toy of a certain brand, get the second toy from the same brand free.

-Buy sets

For children, especially young children, buy toys that come in sets such as a baby doll with a stroller and a high chair.  Take those out of the package and break them into three different presents for the price you paid for the bundled gift.

-Look in unconventional locations

My children get presents from Santa and from me and my husband.  Since they were little, the toys that get from us are often gently used.  I shop garage sales throughout the summer and hide gifts away.  This year my three year old will get a new in the box baby doll that I picked up at a garage sale for $3.  My son will get a wooden box with five different games in it that I found at a garage sale for $5.

Obviously you may not have time to go to (or even find) garage sales now, but you can shop children’s resale stores for quality toys at a steep discount.

They say ‘tis better to give than to receive, and that is true more so when what you give is what you can afford.  Why not enjoy watching your family open their presents this Christmas without worrying where the money will come to pay for everything in January.  It is possible.  Beating Broke and I are both proof of that.

photo credit: aussiegall