If you're not as worried about buying presents around this holiday season as you are about what the extra spending is going to do to your credit card debt levels and bank balances, it might be time to toss away your current gift list and start over with thoughtful gifts that won't cause holiday stress.
Here are some helpful tips on how to make this season a spending holiday, rather than getting wrapped up in holiday spending.
1. Set Limits for Total Holiday Spending
Give your credit card and your mind a holiday by limiting what you buy to what can safely come out of your bank account. Use this opportunity to create or get your budget into fighting shape, and use it to decide how much money you can afford to spend.
The money you can reasonably spend on gifts is money that isn't going to bills. That said, if you want to have a little more to spend, this doesn't have to be just the money left over at the end of the month - you can also use the money that you would normally spend elsewhere, such as on your morning latte. As long as you are using cash (not cash advances from credit cards) without spending your rent money, you are doing great. Just remember to be realistic about what you are willing to sacrifice. You may spend your monthly clothing budget on holiday gifts and then crave a new pair of boots to go to a holiday party. You need to set a budget and limits that you will stick to - without caving in and racking up the credit.
2. Make Your Own "Naughty" or "Nice" Lists
Santa has to buy presents for the whole world - you don't. If your shopping list includes more than five people outside of your immediate family, cut down on the number of people on your present list. Then, bake some cookies to give to all the people you snipped from your original gift list. This will ensure you spread the holiday cheer without looking like a Scrooge.
3. Budget Based on Your Own Finances
Your older brother Joe paid off his student loans five years ago, and he always gets you the fanciest presents. However, if you are in a different place in your financial life you shouldn't follow suit. If you have any doubts as to whether those on your list will appreciate the less expensive presents you buy them, think back to what your friends and family gave to you when their budgets were tighter. There's no doubt that you'll both be better friends in the New Year, if you're not creating debt loads for each other this year.
4. Become a Coupon and Deal Master
Sales aren't the only way to get great deals on the gifts you want for your friends or family. Before you shop online, perform a quick web search for coupon codes for your favorite online stores. Before you shop in local stores, comb through the coupons you received in your mailbox before hitting the mall. While you search through the flyers, make sure to comparison shop for the item you're interested in. Savings of $10 to $100 can happen just by keeping your eyes peeled for deals.
5. Give Your Time
Mom and Dad (or other far-away family and friends) might love nothing more than a visit from you. Give small gifts and large hugs. However, if you're tight on cash and want to send a gift, try a calling card. This will let them buy extra minutes to call you when you can't fly to see them - and it's a good way of letting them know that you miss them!
6. Give Yourself a Better Spending Habit
Get over the how-am-I-going-to-pay-off-my-credit-cards-next-month anxiety by giving yourself a gift by developing a new and improved spending habit. For example, for every dollar you spend on gifts, you could find a way to remove that dollar from your regular spending. Around the holidays, you can use those savings to buy presents, but next month - and the rest of the year - what you save can go into your savings account.
7. Give Personalized Gifts Instead of Expensive Gifts
A small, thoughtful gift is worth more than an expensive gift that someone may never use. Avoid impulses to shop at trendy department stores and start the holiday by taking a moment to think about what those on your list could really use. For example, if your sister loves to bake but can't get the hang of homemade pie crusts, you could buy her a simple pastry-making tool for less than $10 and include a copy of a fool-proof recipe.
8. Organize Group Volunteering Instead of Holiday Parties
Your friends probably struggle with overspending as much as you do over the holidays. Give them the relief of forgoing buying gifts for you by organizing a group volunteer day instead. You'll get to spend quality time together - plus, you'll come out of the day feeling proud of your efforts rather than suffering from buyer's remorse, and anyone can benefit from volunteering. Remember to take along a digital camera, and as you email pictures to each other, you can enjoy the day's memories again for free.
The bottom line is, don't let your debt become the Scrooge that steals the fun out of your holiday season. Spend time with your friends and family, base your gift buying on sentiment rather than dollar value and avoid giving yourself a year-round debt headache.
If you can follow these tips, when your holiday bank statements arrive in the New Year, you'll find yourself singing "Joy to the World" all over again.