What to do with Extra Christmas Cash

You did it!

You stuck to your guns and your budget. In spite of shiny temptations and marketing tricks, you did Christmas on the cheap and saved yourself a ton of money.

Congratulations.

Now, what do you do with all the money you saved? 

If you have credit card or other debt, obviously pay that off first. If you live paycheck to paycheck, put it in a savings account for emergencies. Once those needs have been met, the possibilities for the extra money are exciting.


You could splurge on a family trip to Disney. Now, this doesn’t mean you can waste the money and pay full price. Plan your trip so you can take advantage of off-season prices.  Many hotels and airlines charge a premium for travel during school breaks and colder months. Consider bringing non-perishable breakfast bars and snacks to save money on food.  Search the internet; there is bound to be a blog dedicated to your vacation site with tons of information on where to get specials. You can also fund a plethora of websites offering coupons and deals on everything from car rentals and airfare to hotels and dinner.

You could be altruistic and donate the money. Non-profit organizations always need funds, especially in this economy. Toys For Tots is a charity run by the Marines and focused on giving new toys to children who wouldn’t otherwise have anything to open on Christmas morning. Your local Humane Society is another good choice. If you feel strongly, you can even use your thrifty savings to equip the Cruelty Investigation unit with much needed cameras, video equipment and first aid kits. Instead of donating the money directly to a charity right away, you can use it as seed money. For example, challenge everyone at your place of employment, school or church to donate to a specific cause and agree to match them, dollar for dollar, up to the amount of your savings.

Lastly, you could invest the money. Your IRA or mutual fund can always use a boost. If you have children or grandchildren, you can set the money aside in a number of education savings plans, like a 529 Plan. You can put the money in traditional savings account, buy bonds or even start a CD ladder. The choices are nearly limitless; just check with your CPA on any potential tax issues.

Your goal of achieving a debt-free Christmas was a success; just make sure the money goes to good use. Whether you buy something for yourself or invest in the future, enjoy your reward and know that Christmas really can be done, and done well, on the cheap.

Ways to Save Money on Gifts:

What will you do with your extra Christmas Cash?

 


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Plan Your Christmas All Year Long

For most families, the last 6 wks of the year are the most expensive.

From Thanksgiving through Christmas, all we do is cook and eat, visit and travel, spend and shop.

It can wreak havoc on an otherwise frugal budget! Many savvy moms budget for Christmas throughout the entire year, not just the last month.

The first step to frugal Christmas budgeting is to set aside funds each month for your Christmas shopping.  Open a savings account just for holiday spending. Set aside a small amount each pay period into a separate savings account and withdraw it just in time for a holiday gift shopping spree. If shopping all at once isn’t your idea of fun, you can set up your budget to allow for the purchase of a gift a month and just save each item until Christmas.


In fact, this also gives you the opportunity to take advantage of end of the season sales, essentially stretching your budget a little farther. This may also allow you to buy things you normally wouldn’t be able to afford. For example, you can scoop up warm winter blankets and coats for just a few dollars each in February and March. Retailers need to move seasonal merchandise out of the store to make room for spring clothing. Save the blankets until fall and then make a welcome donation to your local homeless shelter.

Storing extra gifts throughout the year usually necessitates having a gift closet. It can be anywhere, just as long as it is away from prying eyes. Be sure to include a stash of wrapping supplies as well. Wrapping paper, ribbon, cards, tape and gift bags all go on sale for next to nothing after Christmas and you can stock up for next year for cheap. Target lets everyone know that they sell items at 50% off the day after a holiday, 75% off after three days and 90% off after seven days. In fact, many shoppers are making purchases for next year when they shop the day after Christmas.

If you normally have a busy party schedule, this plan-ahead method can work, too. Use your gift closet to keep token, generic gifts for all those people that stop by with a “you-shouldn’t-have” gift. Candles, vases and fine stationary products all go on sale and all appeal to a wide variety of guests. You can also stop by the Godiva Chocolatier on December 26th (early in the day) to purchase boxed chocolates with holiday wrappings and decorations. They sell for half off and, if you are planning on visiting anyone between Christmas and New Year’s, make a perfect hostess gift.

Planning for Christmas throughout the year is easy of you have a flexible list and a sharp eye. Watch for sales and plan accordingly.

Ways to Save Money on Gifts:


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The Truth About Christmas Debt

Every year I bet you hear the following (insert whining) “It’s Christmas.”

Often, its our loved ones (our own mothers, mother-in-laws, sisters, friends) who try and use this as a viable excuse to overspend in an effort to provide the children with the Best Day Ever!

For some reason, making extravagant, unwise, and sickeningly expensive purchases is acceptable during the 12th month of the year.  People simply don’t think; all financial logic goes out the window.

And unfortunately, repeatedly making bad decisions will come back to haunt you come January.  But before you go out and max out your credit cards when you know you shouldn’t, read these  sobering statistics on Christmas spending and the resulting debt.

  • Americans spend $525 billion over the holiday season

 

  • Online spending has increased 12%

 

  • Christmas spending is back to pre-recession levels

 

  • Savings have increased from 1% to 6% of income in the past several years

Sounds pretty good, right? These statistics make it appear, on the surface, that the economy is thriving and shoppers are out there spending their hard-earned money in droves.


The truth is that, yes, shoppers are out there spending, but they are not spending their money. At least, not money that they’ve earned yet. In fact, many Americans have become accustomed to “charging” the entire holiday. Presents for the kids courtesy of Visa. Dinner for the extended family thanks to the generosity of MasterCard. Out of town flight to spend Christmas with the grandparents made possible by American Express.   Before you think of those as acceptable solutions to having cash on hand this holiday season, try these next stats on for size.

  • The average person spends  just under $1,200 over the holidays – including food, gifts and travel

 

  • At least 23% of that was paid for by credit card

 

  • 6 million people borrow to pay for Christmas each year

 

  • Americans average 13 credit cards per person

 

  • When paying by credit card, people tend to spend 112% more than if paying with cash

 

  • A minimum monthly payment is usually 90% interest, 10% principal

 

  • One third of bankruptcies filed in March site overspending at Christmas

 

  • The average American spends 40% more then they earn

Americans have been trained to think that love and friendship at Christmas somehow equates to buying expensive gifts. The truth is that no one who truly loves and cares about you wants a gift from you that puts you into debt. If everyone was just honest about their credit card bills and concentrated on spending less over the holidays, January would be a lot less stressful all around.

So, what’s the solution? It is as simple as ABC:

  1. Accept that you can’t spend like Paris Hilton.
  2. Budget for the holidays like you would any other expense.
  3. Commit to spending less for Christmas each and every year.

If you stick to your guns, you may even inspire a friend or family member to do the same.  Enjoy the holidays without the use of plastic.

Ways to Save Money on Gifts:


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5 Tips on Spending Less This Christmas

For most moms, making a commitment to spending less this Christmas season is the easy part.  Actually sticking to that commitment can be a little harder.

In fact, most moms have probably considered the idea at one point or another through the years, but has either fallen short of the goal, or discarded the possibility.

No matter how good our intentions, once the holiday season gets into full swing, frenzied chaos ensues.

Before you even realize it, chances are you’ve spent way over your frugal budget and haven’t even come close to finishing your list.  There go the frugal spending plans for another year!

But before you throw in the towel yet again, here are five tips to help you stay on track:

1. Resist Window Shopping
Don’t spend your time ogling Christmas displays at the mall.  Even better, don’t go shopping at the mall at all! Big wig marketing executives are paid hefty salaries to convince you to forget your frugal plans.  They are experts at figuring out how to part you from your well meaning intentions, so don’t give them the opportunity to do it! Shop online for specific items on your list.  Its much easier to “just say no” from the comfort of your sofa.


2. Set Up a Budget
Ok, Ok, sometimes this is easier said than done.  But be strict with yourself this year! If shopping in brick and mortar stores, take cash out of the bank to spend on Christmas shopping, and budget accordingly.  You can even make up separate envelopes for each person on your list.

3. Realize You’re Not Perfect
Yes, you should budget. Yes, you should stick to your goals.  But accept the fact that you are not perfect.  No one is.  Don’t let one stray purchase blow your budget completely (sort of like that bite of cheesecake on your diet.)  Realize there are expectations to every rule, and every budget.  If you find the dream gift for your child, at a fantastic price that is just over your budget (but still completely affordable for you), go for it! Don’t let your budget be a punishment.  Just don’t keep this type of behavior up for every single person on your list.

4. Don’t Do it All
How many gift exchanges are you involved in this year? Don’t feel like you have to do them all.  Its ok to say something like “My focus this year is my family, and we’re really not buying gifts.” If you can’t see yourself saying something like that, then consider baking up a gazillion cookies and including your “famous” recipe for them as gifts. Most people appreciate a consumable Christmas present over some tacky mug or Christmas sweatshirt anyway.

5. Go Gift Card
If the thought of staying in your budget is causing you to go weak in the knees in stress, consider giving gift cards this year.  You can buy them in specific amounts that meet your budget, and if you want to make the gift more personal, can consider making a homemade card.

Ways to Save Money on Gifts:

What tips do you have for sticking to a holiday shopping budget?


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