Avoiding Christmas debt
Many people will suffer well into the new year because they have overspent on Christmas presents and celebrations. What’s the point of a few days of fun if the price is months of worry and debt? Christmas is supposed to be about “Peace on earth and goodwill to all” but it really seems to be about “spend, spend and then spend some more”. So how do we avoid being sucked into the financial mayhem that Christmas seems to demand?
- Forward thinking and planning pay off. A Christmas savings account for example, where you put money away during the year means that the holiday season is financed in advance.
- Budget for holiday expenses like having visitors and extra food.
- Lay-by (or layaway in the US) is a great way of spreading the costs of gifts.
- Amongst the family and friends you buy gifts for set a sensible limit. Make it plain to people what you plan to spend and don’t allow others’ to sway you if they plan to spend more. None of us like to appear like cheapskates but we don’t want to be fools either, spending more than we can afford.
- If you have a large family or circle of friends consider doing a Kris Kringle. Everyone draws a name out of a hat and has to buy only one present.
- Or, amongst extended family and friends consider buying only for children under eighteen and cut out adult gifts altogether or give just a token gift.
- Consider less commercial gifts. One woman I know who is a good cook for example, makes up small hampers of fudge, shortbreads, rum balls and mince pies for all her friends. These gifts are much prized and much nicer to receive than any store-bought trinket.
- Be strong. Don’t let yourself be brainwashed and pressured into extravagance. Remember the true meaning of Christmas. You might perhaps notify those you would normally buy gifts for that you are spending your gift money on donations to charity – the homeless, your local hospital, or whatever.
- Don’t equate spending with self-worth. A family I know is in perpetual financial difficulty. Christmas in particular is an orgy of spending for them. They want to appear, and think of themselves as generous and prosperous so they give people expensive presents. They also believe that they “deserve” to have whatever they want so are inclined to buy themselves big-ticket item gifts for Christmas. And they want their children to have “the best” so the kids invariably receive two or three times more presents than they need or even want. As a result they are squandering their future for a frivolous and overindulgent present.
- Avoid using credit cards. Or at least make sure you have enough to pay off the monthly balance to avoid interest costs.
- Consider postponing purchases until the post Christmas sales (if you are really organized you could even buy next year’s presents).
- Be very careful of interest free loans to buy appliances and furniture. If you don’t pay off the purchase in the prescribed time you may have to pay the usually exorbitant interest incurred over the entire interest free period.
Don’t let the pleasure of Christmas be ruined by the financial stress that overspending can cause.
