Holiday Financial Planning

8 Steps For a Debt-Free Holiday

Stores across America have set up their festive seasonal displays. Carols are on a loop over the loud speaker—and giant signs are boasting stellar deals.

Have you begun planning your holiday budget? Here are some smart spending tips for a debt-free holiday:

  1. Set a budget—and stick to it
    Your holiday budget should start like every good budget: by looking at how much you have left over after paying for essentials. How much can you reasonably spend without getting into trouble? Take a look at your monthly expenses, and set a holiday spending amount that won’t put a strain on your wallet. From there, make a list of gifts you need, and set a reasonable amount per person based on your spending limit. (Don’t forget about Hanukkah gifts, stocking stuffers, as well as small gifts for people like teachers, coworkers, the mailman, etc.
  2. Budget for hidden expenses
    Wrapping paper. Shipping costs. Holiday travel. A higher electric bill (for those twinkling lights). Those unexpected expenses can add up quickly. When you’re accounting for your holiday budget, make sure to account for any extra costs.
  3. Find the right price
    Not every seller will offer the same product for the same price, and prices may fluctuate throughout the holiday season. Once you find the product you want, do some online research to compare prices between sellers.
  4. Avoid impulse shopping
    You already bought your partner, child, parent, or best friend their big gift. It’s perfect, wrapped, and sitting in your closet. But then you stumble upon something else you just know they would love. What’s an extra $45 to give your loved one a perfect present?
    Resist the urge! Those extra dollars add up. So, once you meet the set budget for each person on your list, cross them off and be done.
  5. Avoid self-gifting
    The National Retail Federation has found that 57 percent of Americans spend almost $127 each holiday season buying gifts for themselves. That’s a lot of extra cash. Pass on treating yourself this holiday, and leave it to your loved ones to buy you gifts during the season. If there’s something you desperately want or need, re-evaluate the purchase post-holidays, when the January sales kick in.
  6. Go in on a gift
    If you know someone on your list is specifically lusting after a big-ticket item this holiday season, consider whom you can get to go in on the purchase with you. Mom wants the latest smartphone? Ask your siblings to make it a joint venture.
  7. Set up a gift exchange
    It’s unlikely you’re the only one on a budget this season. Everyone wants to save money. Consider pitching the idea of a secret Santa or gift exchange to your friends, family, or coworkers. That way, you only have to worry about one gift instead of several.
  8. Give a “priceless” gift
    On a tight budget? Try going DIY with your gift-giving this season. Are you crafty? Knit a scarf. Good at baking? Make a cookie basket. Have a knack for photography? Have an original print framed. If you can’t think of anything, Google is waiting to supply you with endless ideas for DIY gift giving.
    Don’t overthink your gift-giving strategy. Trust that your friends and family love you and respect your need to budget this holiday season, and simply enjoy your time together.

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