Have a Merry (and Debt-Free) Christmas

If history tells us anything, the average American will rack up over $1,000 in additional credit card debt this holiday season.  For those folks who already live paycheck-to-paycheck and are nearing their credit card limits, this could be the holiday to end it all (financially speaking, of course). I’m sure I won’t be the first to tell you this, but you don’t have to bury yourself in debt to enjoy a meaningful and festive holiday season.  If you don’t believe me, just read on for my top 7 tips.

We all feel a lot of pressure during the holidays.  Friends, family and co-workers all urge us to participate in a variety of holiday events and every event comes with a price tag.  Not wanting to look “cheap” and not missing out on festivities are the most common reasons my clients give me when they try to explain why they overspent during the holidays.

  1. Create a Holiday Spending Plan.  This is just another way of saying “prepare a budget.”   First, look at what you have available to spend (your savings plus maybe a portion of disposable income you expect to collect prior to your holiday of choice).  Then, deduct all of your costs for gift purchases, travel & lodging, holiday parties, etc.  If you’re geared up to spend more than you have available to spend, you have to cut back.  That said, the next 6 tips will help you cut back, as needed.
  2. Consider Gifts from the Heart.  While anyone in your life would surely be pleased to receive the newest iPhone, if you can’t afford luxury items for friends and family, consider something less expensive but more meaningful.  You can tailor a gift for everyone depending on their needs or your relationship.  Maybe your sister just had a baby and you’d like to gift her with an evening of babysitting services so she and her hubby can have a night out.  Other ideas include doing chores, making scrapbooks and keepsakes, and baking cookies or a meal for someone.  While these will certainly take up more of your time, they will leave a little extra in your wallet and will still allow you to show the special people in your life that you care.
  3. Plan a Gift Exchange.  As I get older, my family seems to grow exponentially.  Just a few years ago, siblings and cousins started getting married, having children, and eventually I found myself with nearly 20 people on my shopping list.  It was completely overwhelming.   So I suggested that the adults agree on a gift exchange where each person only shopped for one other person (and we put a dollar limit on the gift, too).  Not only did it remove the stress of having to figure out what to buy for everyone, but it reduced the likelihood that I would overspend.  I was also able to focus on one really great gift, instead of 20 so-so ones, which felt really good too.
  4. Don’t Dis the Dollar Store.  While the adults might love the idea of a gift exchange, it’s a little harder to get the kiddos on board.  But the reality is that most kids play with a new toy or device for all of 3 seconds before it ends up yesterday’s news.  So why spend a ton on something that will be forgotten in just a few weeks?  Instead, start your hunt at the dollar store.  They tend to stock discount toys at a fraction of regular retail prices and also offer dozens of great stocking stuffers for under a $1.
  5. Host a Potluck.  Most families seem to have a holiday meal tradition.  Maybe Aunt Peg hosts Christmas Eve while Uncle Joe hosts Christmas Day.  If you’re planning to host a holiday mean, consider committing to the main dish only.  Then ask everyone else to bring a side dish.  Not only will it reduce the amount of work you’ll have to do, it will cut your grocery bill down to a manageable size.
  6. Remember: Not Every Deal is a Bargain and Take the Time to Compare Prices.  If you must spend on retail gifts this season, don’t rush to make your purchases.  No one likes waiting until Christmas Eve to get their shopping done, but if you see an item you might like to purchase, shop around at other retailers, and on-line.  You may just find a deal, or a similar product for a lower price.
  7. Don’t Be Shy.  If you feel yourself being bullied into an expensive meal or gift exchange, have the courage to speak up.  If your friends and family don’t appreciate that you’re trying to be responsible with your finances, then chances are they’re the ones with the spending problem.  The truth is, most people will be more than happy to cut back a bit so everyone can participate within their own budget.  After all, aren’t the holidays about coming together and enjoying each other’s company?

I hope you take my advice this holiday season; I promise you a new-found freedom and passion for the holidays.  But if not, come see me in January and we’ll cut down that debt with a bankruptcy.  Qualifying debtors can eliminate 100% of credit card debt in as little as 4 months with no payments.



Call: (908) 353-6700    Text: (908) 266-4843    E-Mail lcapece@leclawonline.com

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