Five Ways to Control Christmas Spending
I know it's not December yet, but I'm sure most families have already started shopping for Christmas (or at least have thought about it). It is the most wonderful – and wonderfully expensive – time of year. Between presents, decorations, parties, and dinners out, your wallet can take a serious hit during the holidays. In fact, many Canadians fully intend to rack up a large credit card debt during the season, admitting that they’ll need three months or more to pay it all off. If you want to make the most of your holiday, but you don’t want to be paying for it well into the New Year, here are five ways to help you control your credit card debt during the holidays.
Budget, Budget, Budget
Santa is not the only one who should be making a list and checking it twice. Spending can get out of control quickly during the holiday months, so you need to be prepared to help combat overspending. Make a list of every single person you want to include on your “Nice” list, then go through your list carefully and write down precisely what you want to get each person, as well as what the monetary amount of each gift. Sorting out your gift list can provide a reality check. When you get to the bottom and add up the total you plan to spend, you can get a good idea of how much it’ll cost you. If your list is too expensive, you can reevaluate your gift ideas.
Say “No” to Department Store Credit Cards
During the holidays, department stores take the opportunity to ply their customers with special deals in order to get them signed up for a store credit card. However, these store cards come with sky-high interest rates – no matter what your credit score is, you’ll likely be looking at an interest rate in the high 20s. If you received 20 percent off your purchase when you opened the card, and you don’t pay off your balance, you could actually end up losing money.
If you really want that 20 percent off, just make sure you have the cash needed to pay off your balance right away. Then you won’t carry a credit card balance over into next month – and you won’t have to deal with a massive interest charge either.
Go the Gift Exchange Route
Say you have five family members and five friends to buy for. Those ten gifts are going to take a big bite out of your paycheck. If you want to get in the spirit of the season, but you still want to be able to keep your electricity on, suggest a gift exchange. That way, you will only have one person to buy for, and your stress level will be greatly reduced.
Get Started on Next Year
There’s no time like the present to think about future presents. Get a jump on the holidays and start saving funds for next year’s gift-giving season. If you can, start an emergency fund to help with those little, unexpected expenses that seem to crop up every December. The great part about giving yourself so much advance notice is you can put little increments into your savings funds because you’ll have a whole year to build your account. Once you’ve got some money saved up, promptly forget about it. That way, when you go to make your gift list and budget next year, you’ll have some money ready to go. It’ll be a gift you give yourself!
Don’t Try To “Keep Up With the Joneses”
You may have that rich uncle who gives everyone $100 each year. Or, your best friend might have a great-paying job and as a result, she already owns two of everything. If you feel like everyone has oodles of cash to spend and you’re still scraping by on a shoestring budget, don’t fret. You don’t need to spend a lot of money on people who love you – they will love you no matter the state of your bank account. Holidays are all about spending time with your family and friends. Don’t waste that precious time trying to figure out ways to spend money on them instead.