As I write this, it’s only a month before Christmas and all I’ve seen and heard today are ads about Black Friday & Cyber Monday.  I have to admit that it makes me not want to shop at all this year!  (If you’re on my Christmas list, you might want to read another planner’s blog this week!) 

Over the last several years (maybe decades?), I’ve silently rebelled against the whole commercialization of the holidays.  It probably all stems from my childhood.  I grew up in a small town and there was a place called Donna’s Hallmark, and Donna happens to be my mother.  So, there were years where I suited up in the Easter Bunny costume and tried to entertain kids. On each holiday, as you were finishing your celebration and relaxing – my family would head to the store and tear down that holiday’s display and put up the next holiday’s (real holiday or Hallmark-inspired one) displays.  Let’s not forget the Christmas ornament premieres…IN JULY!!! So maybe I’m not the most objective when it comes to the commercialization of the holidays, but I don’t think I’m alone either.

So, what does my holiday “bah humbug” attitude have to do with your financial life? That’s easy. I’d like for more people to not get consumed with the retail aspect of the holiday and focus more on what makes all holidays special…friends, family, celebrations, and NOT going broke!  I can’t count the number of people I have talked with over the last several years who get seriously stressed out because of all of the people they have to buy presents for and how they are going to be able to afford all of the gifts.  Many people rely heavily on credit cards at this time of year and rack up a big amount of debt that they then try to pay off over the next 11 months and just when it’s paid off, it’s the next holiday season and the cycle starts anew.  How can you avoid the cycle of stress and debt that often accompanies this season?

Here are a few tips that you might be able to implement to keep your fiscal sanity this season:

  • Set a budget!  I know this sounds simple, but most of the people I know just go out shopping and end up totally overspending.  I know when I haven’t set a spending limit, I’ve spent almost twice as much as I thought I would.   I have a “per person” limit and a “total” spending limit.  You might be able to benefit from the same kind of thing.
  • Make a list.  Check it twice if you want to!  When you have a list, you’re more focused and tend to buy fewer impulse items.  This can dramatically reduce the amount of money that you spend as you’re out shopping.
  • If you absolutely positively have to shop, then you can check out all the discounted deals that stores are offering.  For anything over $30-40, you should check out the products online to see if there are discrepancies in price with the major retailers.  Last year, I saved quite a bit of money by knowing what I wanted and where it was priced the lowest.  I was able to do a very focused shopping trip, buying only those things that were on my list and under my budget, and I started and finished my shopping in one day.
  • Consider gift cards!  I know my kids get more excited by gift cards now than they do with actual gifts.  Plus, they’re a time saver for the person shopping.
  • Avoid credit card spending!  Again, this may sound like a simple thing but a lot of people are in the habit of putting all their purchases on a credit card and paying it off at the end of the month.  Except for during the holiday season, this can work well.   Many of these people aren’t able to pay off the holiday splurge and when you’re using a credit card it doesn’t feel like you’re spending “real money.”  If you use cash (yep, the good old fashioned green kind) for holiday purchases, you’ll feel the impact of every purchase and it will seem more real.  Give it a shot this year!  You might be surprised at how just that feeling of spending real dollars puts a little bit of hesitation into purchases that would have otherwise been very easily made.
  • While there isn’t enough time to do it for this year, you can get a jump on next year’s spending by setting up a separate savings account (preferably at a different institution than your regular checking account to avoid the temptation of moving that money into checking) and direct deposit into that account.   If you know your spending limit, you can break it into tiny little deposits throughout the year and next year you can use that money on gifts without the need to use credit cards and without overspending.

If you try some or all of these ideas, this year (and future years) may be a budget friendly holiday season!