If you are contemplating or have been through a divorce this year chances are your budget is already stretched pretty thin. The looming holidays may have you panicking as you wonder how you will afford them. The good news is the best and most magical parts of the holidays won’t cost you a thing; you just have to put yourself in the right frame of mind. Spending a few dollars this holiday season is inevitable so here are a few ways you can prepare yourself for a debt free holidays.
Determine what it is about the holidays that will make sticking to your budget difficult. Understanding those personal limitations is essential as you prepare for the upcoming holiday season.
Compare and Know Your Limits
Do you know how much you have to spend over the holidays? Have you been saving? If not, calculate how much money you have coming in the next two months and how much has to go out. Don’t forget rent, gas, electricity, food, etc. and existing debt payments. The amount left is what you have available to spend on the holidays.
How did you do last year? Were you in debt? Figure out what you spent during last year’s holiday season by reviewing old bank statements and credit card bills. Can you spend the same amount this year now that your situation has changed?
Tips for controlling spending
Reviewing last year’s expenses will remind you of your purchases. There’s more to holiday spending than presents. Decorations, clothes, parties, travel, cards, shipping costs for presents, and phone calls all add to the cost of the holidays.
Make a list of all the things you want to spend money on and prioritize.
- Party planning. If you typically attend several parties out of obligation, give yourself a break and decline to attend.
- The forgotten expenses. Babysitters, taxis, parking, or holiday outfits can add up.
- Be creative. And that doesn’t mean gifts have to be homemade.
Cost Cutting Tips
By making a few simple switches and a little extra effort you just might be able to pull off debt free holidays.
- Turn your annual holiday party into a potluck or an afternoon event to limit the food and drink requirement.
- Wrap gifts with brown wrap, and decorate with a simple ribbon, or have your children decorate with markers to create a personal touch.
- Buy an inexpensive frame for fun photos of yourself and the recipient.
- Take clippings from one of your houseplants in late November. Let it sprout in water then plant it in an inexpensive pot with a ribbon tied around it.
- Offer your services: a certificate for babysitting hours or snow shoveling is always appreciated.
- Scout out some quality used books. Find a classic and inscribe it with a personal message.
Hitting the Stores
Temptation can lurk around every corner during the holidays make it easy on yourself by using cash sources and preparing for paying on credit cards.
- Use your cash resources. Try to use a debit card, cash, or check rather than credit cards. This will help you keep track of what you truly have available to spend.
- Using credit, pay in full. If you are using credit cards, set aside money in your checking account every time you make a purchase. This ensures you have the money available to pay your bill in full by the due date.
- Stay away from store credit deals. Using store credit can also be a problem – it is easy to spend small amounts on a variety of cards and lose track of the cumulative total. Avoid them if you aren’t the type of person to keep an accurate tally.
Buying gifts before you have earned the money to pay for them is borrowing from the future to pay for the present. With the high interest rates on many cards, you can quickly accumulate debt, causing you to fall further and further behind in your payments.
Remember, it’s never too late to stop a spending spree! If you slip up with one purchase, don’t panic. Get right back on track. You’ll enjoy the holiday much more if you’re not dreading the bills in January. Remember that creating and managing a budget plays a crucial part in your financial health and gives you the control you need to meet your financial goals.
Suzanne Cramer is a Certified Personal Finance Counselor® for CareOne Debt Relief Services and is a Social Media Specialist. Suzanne supports our Ask the Expert forums as a coach and writes for A Straight Talk on Debt. You can also follow Suzanne on Twitter where she shares the latest debt industry news, and tips to keep your finances in check with the @CareOneWorks account.
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