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Hacking Holiday Spending

Hacking Holiday Spending
December 12, 2016 Prosperity Connection

 

Believe it or not, the holidays are here yet again. If you’re anything like me, your head is reeling with the ever-growing list of gifts that need to be purchased, wrapped, mailed and delivered. Don’t get me wrong – I love the gift-giving process. Nothing makes me happier than watching my young nephews open gifts that I’ve put so much thought and effort into. Fast forward a month, though, and you’ll find that I’m not so jolly as I tally up December expenses. Suddenly that Rocket Firing Boba Fett figurine doesn’t seem like the “perfect” gift for little Joe.

Last year, when all was said and done, I had spent more on Christmas gifts than six months’ worth of groceries. And, after some research, I realized I wasn’t alone. A 2015 survey conducted by Magnify Money revealed that the average holiday debt accumulated was almost $1,000. And of the 400 people polled, over half “planned to take 5 months or more to pay off the debts accumulated during the holidays.” Even worse, some had concluded that they’d make the minimum payment every month until the debt was paid off in a few years. I decided that I’d had enough.

I scoured the internet for ideas to avoid the financial burden of the holidays. Here are a few of my favorites:

  1. Plan ahead. I took a look at my cash flow a few months ahead of time. Having tallied up the number of folks I needed to purchase gifts for, I came up with a dollar amount for each person. Once I had a total, I decided how much I’d need to put aside each month leading up to December. It meant I had to cut back on some of the extras (eating out, Starbucks, etc.) until the New Year, but it also saved me from accumulating unnecessary debt.
  2. Set reasonable expectations. This is my first married Christmas so naturally my husband and I needed to lay out some expectations for gift giving. To keep expenses low and ensure that we were purchasing gifts that had meaning beyond December 25th, we set a reasonable dollar amount and decided to adopt a practice that I’d run across in an article – something you want, something you need, something to wear, and something to read. And just like that, we started our first Christmas tradition.
  3. Make a list. I love Target, but that $1-$3 section at the front of the store is the bane of my existence. However, if I walk in with a specific list, I find that I’m more focused and tend (we’re not all perfect) to buy fewer impulse items.
  4. Keep track of spending. Remember that gift list I created? I threw that sucker into Google Sheets and reconcile it every few days to make sure I’m not overspending.

This year I’m looking forward to holiday traditions, new and old, that won’t leave me strapped for cash or in debt come 2017. I hope these few tips can help you do the same.

By Abby Clavin, Prosperity Connection Staff