PLANNING AHEAD CAN HELP KEEP SANTA OUT OF DEBT
Every year thousands of Americans go into debt over the holidays because Santa and his elves went a little over budget. With Christmas shopping, increasing gas prices and hosting holiday parties, it is no wonder we have trouble staying out of debt.
Dr. Nancy Porter, Clemson University Extension Family Resource Management Specialist, says that it is easy to go over budget, as there are so many expenses most people forget to calculate into their budget for the holidays. She says the main way to avoid overspending is to plan ahead.
It is important to have a "written plan including all expenditures," says Porter. She also says that this is a great time of the year to teach children about money management, as it is never too soon to begin teaching them how to make and stick to a budget.
The holidays can often be stressful, especially with all of the shopping, entertaining, traveling and planning. These activities can be taxing not just on you, but also on your budget. Porter says that this time of year often includes a lot of eating out, and not just for special parties.
In the hustle and bustle of shopping, it is common for people to just eat while they are out, or to get home and decide to go out rather than using their remaining energy to cook at home, says Porter. However, this expense is often forgotten from the planned budget. It is also common to forget to add in the babysitting bills from holiday outings. Winter car maintenance is also an item typically left out of the planned budget. These should certainly be taken into account along with all other expenses.
People are paying more than usual on food, beverages, decorations, gift wrapping, postage, holiday greeting cards and charitable contributions all during this time, as well. To cut down on decoration, food and beverage costs, Porter suggests having a potluck holiday get together, to which everyone can bring a favorite decorative item, dish or drink. This will allow people to help you bear the burden of the entertainment bill, while it provides them with the opportunity to have a special recipe or centerpiece they enjoy at your gathering.
She also says that some other family traditions can be costly. She recommends trying to eliminate a few traditions that have less of a special meaning, in order to cut down this particular expense.
Gifts are certainly the largest category in the holiday budget, says Porter. And as these can often have more of an emotional tie or guilt factor attached, she says this is typically the most difficult item to cut down. But if this cannot be slimmed down, it is likely that you will end up with an "unwanted present in January" in the form of credit card bills, says Porter.
She recommends that if you know that you will not be able to pay off these "plastic holiday cards," to switch ahead of time to a card with a lower interest rate.
There are many ways to cut down on holiday gift lists. Porter says that if you start ahead of time by telling people that you are trying to save money this holiday season, they may be more forgiving for not receiving a gift from you.
Porter also suggests trying creative gift ideas, such as homemade presents like a recipe box of typed recipes, or a scrapbook of memories. Another creative idea is to create a memory together as a group or family. Instead of gift giving, Porter recommends doing something fun together, such as taking the family to the theater or going on a short vacation together.
Planning to have some gift-giving after the holidays is another good way to cut down the budget, Porter says. Many major sales take place just after the holidays are over, and this can often be a great time to go shopping either for next year's gifts, or for a family gathering near the New Year.
Gifts that can be enjoyed by the whole family also cut down on the number of presents. For example, a family with several children might buy a DVD player or stereo system which everyone can enjoy, rather than buying multiple gifts for each individual family member. While this can be a costly gift up front, it may end up much cheaper than buying smaller presents for everyone.
Source: Angela S. Nixon, Public Information Coordinator for Student Affairs and Advancement, Clemson University News Services firstname.lastname@example.org, office: 864.656.0382, mobile: 864.207.1158, fax: 864.656.0812
Gift Ideas & Strategies:
- Giving a charitable contribution in someone else's name is a way to take care of two obligations at once, because it gives a gift to a loved one, while still giving to the charity.
- Porter says that people often use holiday time as an opportunity for winter vacations, since children are out of school. It is important to remember to factor these extra costs into the holiday budget, as they can add up very quickly, Porter says.
- Porter advises shopping on major sale days to save money, even if it means having to fight crowds.
- Porter also recommends beginning holiday shopping on the Internet, as this involves no gas and it is easier to bargain shop this way. Planning ahead can also keep you from making expensive impulse buys at the last minute, which often increase your overall spending.
- Drawing names among family members or coworkers can often help to cut down on the number of people for whom you must buy gifts.