NEW YORK (MainStreet) — You want to play Santa Claus at Christmas, but you don’t want to have the Grinch of credit card debt hanging over your head in the new year. The good news is that with a little bit of planning you can give all of your loved ones the Christmas you think they deserve without saddling yourself with unnecessary and expensive debt.
Look for Discounted Services
Ellie Kay, author of Lean Body, Fat Wallet, is also the mother of seven children. Almost out of necessity, she's had to learn how to make Christmas a lot of fun without spending a lot of money. She suggests that people look into social shopping deals like Groupon and LivingSocial with locations settings targeted near the person they're buying for. "A lot of businesses are trying to garner more business during the holidays," she says. "You can get a $60 massage for $25 or $30."
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Another place to find good deals online around the holidays is on restaurant gift certificates. "You can find restaurant gift certificates online for 40% off," she says. The best part? You don't even have to pick the restaurant. You just sign the person up and he gets to choose where he wants to go. Another way this saves is on wrapping and shipping -- there's no cost to do either.
Budgeting for the Holidays
"We often don’t think about extra expenses for the holidays," says Erin Ellis, a financial educator with Philadelphia Federal Credit Union. This includes things like travel, entertaining, shipping and even wrapping paper. She urges people to have these things in mind, not just gifts when they're planning for holiday shopping.
More than just a budget, she thinks consumers do themselves a favor by mentally "shopping" beforehand. This means not just choosing how much you want to spend, but also what you're getting each person. You can do a bit of comparison shopping online before you pull the trigger on your purchases.
Finally, when budgeting, Ellis says that you should consider buying group gifts -- from your entire family, to another entire family. "You can splurge on a group a lot easier than you can on one individual."
Differentiate Between Types of Gifts
Kay points out that you don’t have to spend money to get someone a good gift. For example, crafting and baking are great ways to spend time with your family around the holidays while making no- or low-cost gifts. "We basically break things down into people we have to buy gifts for, people we can make gifts for and people who just get a card," she said.
Crafts and baked goods work really well for coworkers and teachers. Cards are basically for people that you haven’t really exchanged gifts with for years. Kay suggests Pinterest as a great place to start finding craft ideas. Indeed, something that you craft might have a more lasting and personal value than something you just pick up at the mall.
Limit the Number of Gifts You Give
When it comes to her own family, Kay and her husband limit the number of gifts exchanged to three. Referencing the Nativity itself, Kay says "We told our kids, 'if it was good enough for God, it’s good enough for you,'" she said. She estimates that her family has saved over $20,000 over the years simply by keeping the number of gifts they give capped at three. Perhaps most importantly, by spending less, you can take some of the commercial aspect of the holiday away and bring the focus back onto you and your family spending time together. While tangible, commercially-purchased gifts can be a lot of fun, nothing compares to the time you spend with and around your family at Christmastime.
"The average family spends until May paying off what they spent at Christmas," she says. "Those
people who have the least debt
are the ones who set a budget and have a spending plan."
--Written by Nicholas Pell for MainStreet