Each year people go into debt shopping for year-end holiday gifts that they end up paying off for several months.
Fortunately, there are some simple steps you can take to cut down on the financial impact of the holidays. The following 5 tips allow you to enjoy the holidays to their fullest, while also cutting down on unnecessary or frivolous expenses.
1 – Plan for a stay-cation. Who says you have to go on a vacation each holiday season? You can save a lot of money and create a new tradition by staying home instead. There are probably wonderful holiday events, activities and local sights and sounds worth seeing right in your local area. Plan for a stay-cation instead of a vacation to save some serious holiday cash.
2 – Spread your expenses out over the entire year. You can do this 2 different ways. Each month budget some money that you will use for holiday expenses. Then use that money at the end of the year when you shop for decorations, gifts and other holiday items. You can also make holiday-based purchases throughout the year. Hit those after holiday sales. When Christmas is over, stock up on decorations when they are 50-75% off. Either way, this strategy eases the impact on your pocketbook or purse during the holidays.
3 – Make gifts rather than purchasing them. When you teach your children to hand make gifts instead of buying them, you teach the real meaning of the holidays. This also promotes creativity, imagination and other important life skills. Gifts mean so much more when they are heartfelt creations rather than retail store purchases.
4 – Limit the number of gifts each person gives. If gift-giving is a part of your holiday celebration, do you really need to give multiple gifts to multiple people? Giving just 1 gift per person keeps your holidays from evolving into nothing more than a "what am I getting this year" mindset. If you have a large family, draw names. That will help you save a ton of money and time.
5 – Don't attend each and every party or gift exchange you are invited to. You should never feel obligated to attend a holiday party if it is going to hit you squarely in your checkbook. Limit the amount of party invitations you accept if they have a financial requirement attached to them.