Avoiding the Holiday Financial Hangover

holidayhangoverdebtGifts for family. Gifts for friends. Gifts for co-workers. Gifts for neighbors. Gifts for your childrens’ teachers. Gifts for…

Hold on. How are you supposed to afford all of this? On top of that, you haven’t even considered the price of holiday meals, travel, and entertainment.

Spending time with family and making holiday memories: Priceless.

Spending money on holiday gifts, entertainment, etc., $805.65 per person (according to the National Retail Foundation (NRF)).

During the holiday season many of us throw our budgets to the wind and splurge. We feel great in the moment, but then the holidays end and the stress sets in. We review our bank and credit cards accounts and immediately start looking for ways to recover from the holiday financial punch. It doesn’t have to be this way. Here are some tips to help keep your spending in check:

  1. Reflect on last year. Take a look at your holiday bills from a year ago and think about whether your financial situation has improved or worsened since then. Be brutally honest with yourself. Are you really up for a repeat spending performance this year? If not, think hard about how much you can afford to spend.
  1. Count the costs. Remember that gifts aren’t your only holiday expense. Factor in the costs of travel, food, candy, a tree, decorations, gift-wrapping paper, greeting cards and postage when calculating your holiday budget.
  1. Check your list twice. Make a list of people you plan to give gifts, and write down what you expect those gifts to be. Get organized as early as you can, and include prices on your list so you can see how much you’re on track to spend. Having the gift list with you when you shop can help you avoid impulse purchases.
  1. Limit your use of plastic. Unless you’re very good about paying your credit-card balances off in full each and every month, view the cards in your wallet with a healthy measure of fear and trepidation. If you must use credit and you know you will not be able to pay everything off right away, try this approach: pay with cash for smaller purchases. Next, make a plan to pay off your credit card accounts within two to three months. Finally, limit your spending to the card in your wallet with the lowest interest rate.
  1. Don’t procrastinate. Avoid waiting until the last minute so you have time to compare prices and take advantage of sales. Shopping early also will make it possible for you to avoid expensive express delivery charges.
  1. Time the sales. You may be able to avoid crowds and get first dibs by shopping after 6 p.m. on the evening before the sale officially kicks off. While this does not always happen, it is fairly common for discounts to be activated the night before the sale.
  1. Steer clear of unwarranted warranties. In almost every situation, you can feel comfortable about not paying for extended warranties on gift items. Unless you’re buying a not-fully-proven technology, such as a fancy LCD or plasma flat-panel television or a rear-projection DLP, LCD or LCoS television, or maybe a treadmill or an elliptical trainer (which can be expensive to fix), the cost of the extended warranty usually equals the cost of a typical repair.
  1. Hunt for discounts on the Internet. When making online purchases, have you ever spotted those little areas where you can enter a “promotional code” or “coupon”? That’s a sign to open another window on your browser and do a quick Google search for the retailer’s name along with the same catch phrase used on that retailer’s site. You could find a coupon code in seconds and save money on your purchase.
  1. Make your own gifts. Give homemade gifts, such as cakes, cookies or gift certificates for your services. Such services could include babysitting, running errands, cooking a nice dinner, doing handyman work, repairing or detailing a car, or helping someone build a website, to name just a few possibilities.
  1. Keep it simple. Substitute expensive get-togethers and elaborate holiday dinner parties with inexpensive entertainment at home, such as a neighborhood potluck dinner or an evening of caroling.
  1. Don’t keep your money woes to yourself. Find someone to confide in if you find yourself unable to cope with your debt or spending. If it’s not a family or friend, consider contacting the Nation Foundation for Credit Counseling (nfcc.org; 800-388-2227).

Money can’t buy happiness, but it can buy a lot of gifts. NRF estimates $630 billion in sales this holiday season. But not everyone faces the season with confidence, and excitement. For some, the holidays can bring on a great deal of stress and frustration. Our advice for the holidays – focus on what you can do, not what you can’t. Make memories and enjoy time with family and friends.

NRF’s Holiday Survival Kit


2 thoughts on “Avoiding the Holiday Financial Hangover

  1. Some great points here, I am always looking for new ideas to make Christmas less of a financial burden. I agree with the idea of sharing things as well – too often we keep our financial woes to ourselves; shame, not wanting to bother someone or feeling like you are putting an expectation on them all holds you back. I found that actually talking with my mates generated new ideas, shared concerns and a feeling that I was not alone – a positive step for us all.


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