Despite our resolve to “spend less next year,” most of us overspend during the holiday season. Perhaps it’s the twinkling lights that distract us from our bank balance, or the sugar high that makes us open our wallets with no thought to next year’s finance charges.
Whatever the reason, most of us will be paying for those stocking stuffers well into spring, and some of us will carry this year’s splurges into the next season. Here are nine tips for a speedy recovery from holiday spending, and how to prevent overspending next year:
1. Return What You Don’t Need or Want
Rather than hold on to duplicate gifts or gifts you do not want or need, exchange the gifts for items you need now or may need in the coming months, such as a birthday gift, or something your run out of regularly. Of course you can always return an unwanted gift for cash, and use it to pay down those hefty credit card bills.
2. Double Your Credit Card Payments
Finance charges add up faster than you can blink, and you may end up paying $50 for a pair of socks before you’re through paying off your cards. The best solution is to pay off the balance of your cards when the statement comes this January, but that is not possible for many families. Instead, curb enough expenses to double your payments each month, at least until the holiday expenses are covered.
3. Put a Cap on Entertainmnet Expense
Holiday movies, concerts, pageants, and the ubiquitous DVDs and other media gifts are enough entertainment to last you and your kids for more than a little while. In order to raise some cash to pay off your cards, put a moratorium on going out to dinner, movies, and purchasing unnecessary items, at least through January. Instead, institute game night, book club, or an outdoor activity. Replacing the same old expensive fun with exciting new (free) fun helps to stake the sting out of staying on budget.
4. Do Your Taxes
If you are one of the lucky few that actually receives a refund each year, do your taxes as soon as you receive all of your forms from employers, investment companies, and banks. Use the refund to pay down debt, or, if you have a good handle on that already, use it to invest in next year’s holiday.
5. Do Your Spring Cleaning Early
Spend a weekend sorting through all of those tucked away boxes and bags and pull out anything you haven’t used in a while, or don’t want anymore. Take digital photos of the gently used items and put them up on eBay for auction. For larger items, such as furniture, exercise equipment, or even collectibles, you could also post an ad for free on Craig’s list and sell it locally. Another benefit of spring-cleaning is all of that “found money” lying about. Use the proceeds of your cleaning adventure to pay down holiday debt.
6. Hit the Sales
If you have a little extra cash (not credit), sit down with the sales circulars and make a list of items you may need for next year. Post-holiday sales can save you as much as 75%, which will help you keep costs down next year. Pick out next season’s holiday cards, purchase ornaments, gloves, and hats as gifts; and stock up on lights, decorations, and wrapping paper.
7. Make a Plan
Holiday spending can get out of hand when you don’t have a plan. Chances are, you will have the same people to buy for next year, so make a plan now for how much you would like to spend and ideas for gifts. In the coming months, take advantage of sales and pick up gifts on your list as you go. Your spending will be spread out, and you are less likely to pay full price for certain items. Remember to pay cash!
8. Revive The Christmas Club
The first free moment you have in January, go to your bank and open up a Christmas club savings account. It may sound old fashioned, but it is a simple way to save for the holiday. The bank will take out any amount you specify, as often as you like; usually once a month. Even if it’s only fifty dollars a month, by December you will have saved $600 towards your holiday expenses.
9. Set Up A Family Exchange
Gifts for extended family can get way out of hand, and we rarely budget for it in advance. Start talking with your family now about cutting costs. A family exchange is a fun solution most people would agree to. Each family is matched up with another family, and is given a dollar amount to spend. It takes the guesswork out of deciding how much to spend, and it can be fun to see what everyone comes up with!
The holidays are a time to celebrate traditions and family. Financial stresses put a cloud over the festivities, and make it difficult for you and your family to enjoy the season. By taking steps to plan for the holidays financially, you can keep the focus on what is important, relax and have fun.
Copyright (c) 2007 Pat Brill