How to Avoid Holiday Financial Stress
The holiday season is a time of dread for many people. Poor spending habits and financial anxiety ruin the happiness of the season. A new year filled with new debt soon follows. But you can avoid this ugly cycle that ruins the holidays for so many. Here are some ways to better manage your money this holiday season.
Buy Fewer Gifts
The holiday season is a time for gift-giving. It feels great to brighten the day of a friend or family member. But it’s also easy to get carried away, and buy gifts for practically everyone you know. This includes your mail delivery person, your hairdresser, your favorite clerk at the bank, etc… While this is a nice gesture, it’s likely that none of these people want or expect a gift from you. A heartfelt holiday greeting would probably suffice.
Make a Budget and Stick to It
Decide beforehand how much you’ll spend on each gift. Otherwise, you’ll end up spending way more money than you’d anticipated. Figure out how much money you’ll have left after you’ve paid all of your monthly bills. You can also include a number for unexpected expenses that might arise. After you’ve figured that out, you’ll have a better idea about how much you can spend on each gift. Buy your gifts based on your budget. If one person’s gift is over the budget, either choose a different item or buy someone else a less expensive gift.
Save Yourself for Last
It’s easy to get caught-up in the excitement of buying lots of gifts. And if you’re like most shoppers, you buy two or three or more items for yourself, too. Who can blame you? The sales are just too good to pass up. But you must control yourself, and hold off on buying things for yourself. Buying something for yourself every time you buy for someone else is a short trip to humongous debt. Instead of making impulse buys for yourself, create a wish list. If you still want the item after the holidays, then consider making the purchase. You could even share your wish list with friends and family.
Choose Thoughtful Over Expensive
Some shoppers think an expensive gift is always better than a less expensive option. These are the shoppers who go into debt attempting to buy a bunch of extravagant gifts. But most people prefer simple and meaningful gifts over gifts that simply cost a lot. For example, say your sister is an over-worked divorcee with 4 children. Which do you think she’d enjoy more? An offer to keep her kids at your place for an entire week? Or a $200 dress that she’ll probably never wear anyway? Avoid thinking a gift is good just because it’s expensive.
Compare Prices
Shopping can sap your strength. Going from store to store shopping for the best deals is tiring. Even if you shop online, you can get tired spending time in front of the computer. You might simply choose the first deal you find just to get done with shopping. The problem is you might miss a better deal in your rush to finish shopping. Comparing prices and searching for online coupons can save lots of money. You shouldn’t spend an excessive amount of time comparing prices. But it’s worth an extra 20 to 30 minutes to shop for a better deal.
Avoid Buying More Just to Save a Few Dollars
Some of the most tempting holiday deals involve free shipping. Shipping can cost a fortune, so getting it for free seems like a great deal. But more than likely you’ll end up spending way more than you’ve intended. For example, say your order is $4 below the free shipping threshold. You might add another item that costs much more than $4. You might even get something you can do without simply to get the free shipping. In the long run, you do get free shipping. But you spent more money on your order than you’d planned. And sometimes you’ll discover the cost of shipping with your original order is actually less than you spent to get free shipping. Keep in mind, just because stores have sales and discounts, that’s ultimately taking money out of your pocket. So when your looking at a sale and your believe you have saved $100, you actually find out later that you have spent way more than you intended. So how much did you save again?
Avoid Opening Store Credit Cards for Discounts
It’s common to find deals such as an additional ten to twenty percent off your purchase if you apply for a store credit card. When you add that to the sale you’re already getting, it’s hard to resist the offer. But that great deal is likely not a great deal at all. Most store credit cards have high interest rates. Some even have expensive yearly fees. Make sure that card is really a bargain before agreeing to the deal.
As always, use your best judgement when it comes to spending and budgeting for the holidays. Instead of going in blind with the idea that whatever I spend is what I spend, have a goal and gift targets to estimate the overall bill. This will keep you from buying excessively and won’t leave any surprises after the sales are all said and done.
