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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How To “Make Under” Your Christmas

Are you sick and tired of all the hustle and bustle of the holidays? Do you want to just stop all the craziness and go back to keeping it simple?

Try these ideas for a “make under” Christmas so you can slow down and save money. Have an effortless and down-to-earth celebration this year without saying “Bah Humbug”.

1. Simplify Dinner: Instead of a fancy, expensive,  over-the-top dinner that takes you days to prepare, consider having a potluck with the family. If every family member brings a simple dish to share, you have just reduced your cost AND your workload without having any real effect on either the happiness of the occasion or the quality of the food.


2. Simplify Presents: The easiest way to make gift-giving streamlined if you have a huge family full of aunts and uncles and brothers and sisters and cousins and nieces and nephews is to draw names at Thanksgiving (or assign them through email). Each person buys a nicer gift for that one family member.

3. Simplify the Party: Don’t go through the expense and trouble this year of a formal party. Your friends most likely have tons of holiday functions to attend. They’ll need to get dressed up, find a sitter and stress about being late for all of them. If you’re doing a party, keep it ultra-casual. Invite all your friends over, with their kids, on, say, a Thursday night. Have everyone wear jeans and do something different like ordering pizza. For about $100, you can probably buy enough pizza and soda to feed all of your friends and their kids with less stress, very little clean up and a lot of holiday cheer.

4. Simplify Cards: Ok, I will admit it.  I am guilty of mailing Christmas cards late…if at all.  Stamps and cards can really add to an already stretched budget. For many moms, just the thought of having to address and comment in all those cards can be distressing. Why not send e-cards this year? Or, if that is just too informal for your family, don’t send cards for Christmas at all. Wait until after Christmas and buy up some festive, but generic, and start a new tradition of mailing out New Year’s cards in January. Less rush. Less cost. Less stress. And something different for family and friends to look forward to.

5. Simplify Decor: Keep decorations minimal. Don’t drag out box upon box of ornaments and spend days covering every square inch of your house in holiday cheer. Create a nice display on your mantle or put a beautiful wreath on your door. Decorate the tree with the kids, perhaps making your own garland or ornaments. That’s it.  Best part? There’s less to clean up too.

6.Simplify Cookies: Did you know that the average person in the USA gains about 5 pounds over the holiday season? Consider saving yourself the after-Christmas diet in January and don’t make any cookies this year. You’re sure to get a few cookies from other parties and moms anyway.

Ways to Save Money on Gifts:

What other ideas do you have on ways to create a memorable “Make Under” Family Christmas this year?


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10 Ways to Do Christmas on the “Cheap”

Christmas is that time of year when all moms get rushed and have a tendency to overspend, oftentimes without even realizing it.  Want to avoid that surprise credit card bill come January?

Stick to your budget!

In fact, you can make shopping easier by purchasing gift cards for nearly everyone on your shopping list. When you use gift cards, it’s easier to keep to your budget and, if you decide to buy $10 gift cards for all those extras on your holiday list, you can manage an inexpensive and stress-free holiday season. Of course, not every recipient lends itself to a small denomination gift card, but for the ones that do,  these places can be excellent choices.


1. Best Buy: Have a gamer or tech lover on your list? They’ll love a Best Buy gift card. Ok, ten bucks won’t buy too much but it does help defray the cost of whatever it is they really would like.  Plus, it gives them the excuse to go in and browse!

2. Starbucks: When in doubt, coffee wins. Seriously, is there anyone who doesn’t like Starbucks? A frugal shopper can get at least three cups of joe out of one itty bitty gift card. And you’ll feel good knowing you’ve brightened their morning THREE times.

3. iTunes: Have a teen or young adult that you are shopping for? Chances are they have an iPods or similar product. Your gift will be enjoyed for years to come as they download their favorite songs.  Maybe they will remember your generosity every time they hear their choices.

4. Blockbuster: Yes, Virginia, there are still Blockbusters.  Many people have been lured away from old fashioned “video” rentals by Netflix and Redbox, but for most people, Blockbuster is still a local option. You can make a gift basket with a couple packs of  microwave popcorn and sodas with your gift card.  Oh, and check out the prices for Blockbuster gift cards at your local grocery store.  Sometimes its cheaper.

5. Cold Stone Creamery: Want something that will bring a smile to their face? Cold Stone is a treat among ice cream parlors, allowing patrons to basically create their own blends.  Keep a look out for coupons to include to make that gift card stretch even further!

6. Barnes & Noble: This is my fall back gift of choice, especially to my father.  If you have a book lover (or even a music lover or coffee lover) you can’t go wrong with Barnes & Noble. The best part is not actually spending the money, but spending the time wandering the store trying to pick something out!

7. Phone Card: With the rise in popularity of Net10 and TracFones, its pretty easy these days to buy a refill card.  Yeah, it’s not the most personal gift, but if you ask my tweenage daughter, it’s at the top of her list!

8. SkinIt: Have a tech lover? Most techies love cool accessories for their gear. And at Skinit.com, they can get what they want. Skinit offers 1,000’s of different “skins” for laptops and other mobile devices. These are basicallly giant, re-positionable stickers. The  smallest denomination for a gift card is $14.99 but when you weigh in the cool factor, it’s probably worth that extra 5 bucks.

9. Movies: This can be a great way to gift (on the cheap) nieces and nephews in your family.  Movie theaters offer gift cards for tickets and snacks.  If they go to a matinee, they might just have enough for a ticket and a shared popcorn!

10. Amazon: If you’re looking to buy me a gift, send Amazon.com codes. And delivery is versatile.  You can email a gift, mail it, or even share it via Facebook.  Gotta love simplicity.

Hopefully, these gift card ideas will help you stay in budget this Christmas season!

Ways to Save Money on Gifts:

What are your favorite places to purchase gift cards?


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