By: Kathleen Zenisek, First Vice President
Ever wonder why so many people get the “winter blues” in January? Receiving all the bills from holiday shopping could have something to do with it. But with some planning and creative shopping, you can ensure your holidays will be merry and debt-free.
- Develop a realistic budget. First, decide on the total amount of money you have for holiday festivities that includes everything you anticipate spending. Be sure to account for travel, food, clothing, entertaining (including babysitting), wrapping, cards and gifts. Do you have the cash to do it all? If the total amount doesn’t match your budget, don’t fudge it — cut costs.
- Gift wisely. Make a list of everyone you’ll be buying presents for and include year-end tips to newspaper carriers, housecleaners, hairdressers, and smaller gifts for teachers and co-workers. Now go through your list again and determine who really needs to be on the list. Then, calculate the amount you can spend on each person given your budget along with two or three gift ideas. Some people find it helps if they make a separate envelope for each recipient and put the applicable amount of cash in it. Keep track of everything you buy, overspending doesn’t happen by accident.
- Shop smart. Watch for sales and discount coupons for items on your “buy” list – and make only planned purchases. Delay buying for people you won’t see until after the holidays, when stores slash prices - not only on gifts but on decorations as well. Purchase only one significant gift for each person on your list, not several smaller ones. When you buy one small $10 gift for one child, you feel pressured to buy the other kids something too, and before you know it, you’ve spent $40 on nothing. Shop with big bills, you’ll be less likely to break a $50 bill for a silly stocking stuffer or a mocha latte. Even better, avoid unnecessary temptations entirely by shopping online with reputable merchants – you not only save gas, but you may get free shipping. Think outside the (big) box (store), drug stores and grocery stores offer some great deals on gifts including gift cards from many merchants. And lastly, skip buying for yourself - avoid the “to me, from me” purchases by giving your kids or spouse your wish list.
- Be creative. You might be surprised how much family and friends will value a handmade item or the gift of time. Give a certificate for a “special dessert,” free babysitting, housecleaning, or to spend a day together. Pass on your favorite novel or pick up a copy at a used book store and include a personal note with other book suggestions. Choose modest gifts for teachers, friends and co-workers. While it would be grand to bestow a nice leather cover for your child’s favorite teacher’s iPad, a $5 gift card to a local coffeehouse would also be appreciated. Work late so that your co-worker can attend her child’s holiday party. Use family photos and create a personalized calendar that’s designed to include birthdays and holidays. Build theme gift baskets for different people. Browse antique stores, pawn shops and auction sites, you might find some rare, hand-crafted, collectors editions or vintage items. And, it’s okay to re-gift an unused gift card, but only after checking the balance and the expiration date, of course.
- Cut the “charge it” habit. Only charge what you can pay off in January. Use one bank card and leave the rest at home. Place your other cards in a water-filled bag in the freezer so you’re not tempted to use them.
- Don’t shortchange yourself. Avoid taking a loan (if allowed) from your retirement account to pay for holiday spending. It’s surprising how many shoppers do this. Some people argue that taking a 401k loan isn’t that bad of an idea because it is your money and you are simply paying yourself back the interest. While that is true, you are still hurting yourself over the long run. The more money you take from your account now, the less you’ll have working for your future. Plus, if you leave your job before the loan is paid, you’ll have to repay it in full or pay taxes and possibly a 10% penalty.
- Join the club. A holiday savings club makes saving – and giving – easy and ensures that you avoid the budget-busting, post-holiday credit card bill. You can open one at a bank or credit union with a very small initial deposit and then save throughout the year. Late in the fall, the total amount you saved is automatically transferred to your bank account or issued to you in a check. To figure out how much you need to save in advance, compare your receipts with your actual spending come January. Simply set a new budget and save enough cash each month to fund it – and you’re ready for the next holiday season.
- Shop Year Round. Create your gift list as soon as January and shop all year. This gives you more flexibility in your holiday schedule, more time for creativity and allows you to take advantage of year-round sales. It also results in fewer impulse buys, last minute panic, out-of-stock must-haves and dealing with hoards of other frantic shoppers.
A little planning now and your holiday mood could last straight through the New Year!
- Local Banking Logic by First State Bank