So you’re saving for a home, and at the same time the holiday season is approaching. It seems that every year you’re left with a mountain of debt at the end of the season. Don’t despair; you are not alone. The American economy is relying on you to over spend this year; in fact according to the National Retail Federation, holiday shopping in November and December is projected to reach $438.5 billion. That amounts to 20 percent of all retail sales in 2006.
With some planning and a little resolve, you can avoid this discouraging post Christmas epidemic. Here are some tricks for celebrating the holiday and staying out of the red.
Create a Budget
I know this sounds like you’re taking all the fun out of Christmas, but this is something that will go a long way to keeping you out of debt this season. Get an estimate of all your holiday expenses, including gifts, entertaining, cards, postage, gift wrap, food and beverages. Once you have a realistic amount, work with this total and stick to your budget.
Open a savings account in January and schedule an automatic transfer every month to begin saving for next year.
Be a Smart Shopper
Do you have one of those large families where everyone buys for everyone? Maybe it’s time to suggest drawing names for a gift exchange with a pre-set spending limit; your family will thank you for it.
Shop early in order to help spread out those expenses, avoid holiday crowds, and to take advantage of bargains throughout the year. Be forewarned; don’t fall into the trap of spending twice as much when the Christmas spirit overtakes you in December.
Redeem credit card reward points or frequent flyer miles for gift certificates wherever possible. I save points from my local grocery store and get my turkey for free every year.
Make shopping lists and actually stick to them.
Be Organized
Get at least 4 gift ideas for each person you’re buying for. This will ensure you’re buying people exactly what they want and what you can afford.
Make lists of all your “to do’s” for the holiday. It’s a big event, especially if you plan on entertaining or baking, there are a lot of expenses and details to account for.
Get Creative
Gifts don’t always have to come from a store. Homemade gifts can help you stay out of debts, but you need to start early and plan for it. Themed baskets full of home baking or crafty items are always well received.
This applies to decorations as well as gifts. I still remember many a Christmas season sitting around the table as a family making funky gift tags or wreaths.
Walking away from the holiday season debt-free is not easy; you have to be committed to making it work. Think back to your fondest Christmas memories; are they full of expensive gifts and extravagant spending? For most people, they include holiday dinners with family and friends, and enjoyable time spent together. It’s so easy to spend money on useless items simply because you’ve gotten caught up in the holiday hype. A debt-free season doesn’t just mean being frugal, it means spending your hard earned cash on things that really matter.