How To Avoid Blowing Your Budget This Christmas

| December 15, 2017
Share |


The holiday season is upon us. It’s the time of year for spending time with family, cozying up by the fireplace with some hot chocolate, decorating the house with lights and mistletoe, listening to your favorite (or dreaded) Christmas music, and…shopping. So. Much. Shopping. Shopping can be an enjoyable experience, and it can be one way to show others how much they mean to you, but it can also get out of hand if you don’t have a plan. Budget-blowing in December isn’t uncommon, and Christmas shopping makes it pretty easy to do. More broadly speaking, year-round compulsive shopping can have even worse affects on your finances than just splurging on that Tickle-Me-Elmo or whatever the must-have gift is this season.

So how can you avoid some of the common pitfalls this Christmas? First, let’s talk about the a big-picture topic. Decide for whom you are going to purchase gifts. Depending on the size of your family, and the financial status of your extended family, you may decide to purchase gifts for only your immediate family such as your spouse, kids, or parents. On the other side of the spectrum, maybe you are able to purchase gifts for your adult siblings, nieces and nephews, grandparents or grandchildren, cousins, aunts, uncles, milkmen, dog walker, and chef. Sometimes extended (or even immediate) families draw names or do other forms of gift exchanges to lower the financial burden or purchasing gifts, while still maintaining a gift-giving tradition. If you are in the position of needing to reduce how many people you buy for, don’t be afraid to bring up the subject with those people who you need to cross off your list. You may be surprised; they may have been wanting to discuss it with you, too, and perhaps they didn’t know how to bring up the topic.

Once you know who you are buying for, set a budget. What’s your cash flow like? How much cash do you have on hand? Can you use that cash without dipping in to your emergency fund? How much have you budgeted for in the past? Decide how much you think is appropriate when balancing your desire to show love through gifts, versus what is a financially healthy amount that won’t break the bank, cause you financial stress in the future, or send your kids the wrong message about what’s important in life. Lastly, don’t let your family members’ Christmas lists determine your budget.

Now comes the hard part: stick to your budget. This is where people tend to make mistakes. Don’t be swayed by advertisements. Don’t give in to impulse buys. There are also a few practical ways you can lower costs. Many credit cards offer price protection, so if you buy something with that card and the price drops within a certain timeframe, you can apply to have the difference refunded to you. Many retailers do the same thing. If you’re shopping online, check out camelcamelcamel.com. There, you can build a wish list of items on Amazon, see the price history of those items, and set price alerts when the price reaches a certain threshold.

On a more relational note, don’t buy in to the notion that your family will love you less if you don’t buy them everything from their list. You may also choose to use gift budgeting as a teachable moment to explain to your kids that resources aren’t endless. Perhaps you choose to give to charities this time of year, too, which can also be a great teachable moment. There are plenty of great local and global organizations who rely on donations this time of year to accomplish their missions, and giving to a cause about which you are passionate can be a very rich and meaningful tradition.

Most importantly, don’t lose sight of what’s important this time of year – and year-round. Studies show that spending time with friends and family, being grateful for what you have, and enjoying experiences are far more gratifying than things. Maintain that perspective when your kid is crying because they didn’t receive an Xbox One X and can’t enjoy true 4K gaming.

unsplash-logoHeidi Sandstrom.

Share |