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Follow These Tips to Avoid Going Broke at Christmas

7 minute read

Nick Steinberg

By Nick Steinberg

Unless you’re a total Grinch, Christmas is a time of year many look forward to. Most of us get to spend time away from work (yes!), eat delicious food (yum!), and spend valuable time with family (yay?). Unfortunately, commercialization has added a lot of unneeded stress to this time of year. Celebrating Christmas (or other religious holidays that fall in December) comes with social pressure to spend, spend, spend. Unfortunately, many of us don’t handle our money well at this time of year. In fact, the average American will take on $1,000 in debt over the holidays. Nearly half of those people will take four months or more to pay it off. Yikes!

It doesn’t need to be this way, though. With a little determination and planning, you get through the holidays debt-free. Here are nine tips to help you from going broke this Christmas.

Create A Holiday Budget

This may sound obvious. However, when you consider the level of debt people take on over the holidays, it’s clear that not enough people are budgeting correctly. Ideally, your existing monthly budget will already have holiday spending factored in. If it doesn’t, it’s still easy enough to create a basic Christmas budget. Start by listing everyone you need to buy for and assign a spending limit to each. If you end up spending over or under those limits, feel free to move the money around. The key is to not go over your total budget. Ideally, if you follow the tips on this list, you’ll end up under it.

One of the best ways to make sure you have enough money at Christmas is to save up in advance. Add up your total Christmas spending from the previous year and divide by 12. This is the amount you should put away each month so you have enough to cover your costs when the holidays roll around again.

Spread Purchases Throughout The Year

Even with careful planning, coming up with hundreds or even thousands of extra dollars for Christmas expenses isn’t easy. With holiday bonuses largely a thing of the past, most of us simply don’t have extra income around November and December for all our expenses. One way to offset this burden is to spread your gift purchases throughout the calendar year. You’ll not only beat the holiday rush but be able to take advantage of sales over the course of the year too.

Yes, this means you’ll have to have your gift ideas planned out well in advance. No more leaving it all to the last minute. However, with a little organization, getting an early start can be an effective way to save money when December rolls around. It may not save your wallet this year, if it’s already too late in the calendar. You should definitely consider it when January rolls around, though.

Share Your Budget Plans With Friends And Family

Although attitudes are shifting, there’s still a cultural pressure to spend a certain amount of money on Christmas gifts. No one wants to be labeled a cheapskate. That means we often purchase things that may be out of our budget to keep up appearances. Unfortunately, spending beyond your means is also a good way to go broke.

If you’re feeling pressure from family and friends to spend an amount you’re not comfortable with, talk to them. Be honest about your budget and how much you’re looking to spend. If they’re not monsters, your friends and family will be understanding of your situation. They may even be encouraged to cut their own holiday spending too. By addressing the matter head-on, no one will get their nose out of joint at you for not getting them Airpod Pros this year.

Set Boundaries

As already mentioned, planning is one of the best ways to keep your finances on track over the holidays. However, making a spreadsheet is only one part of the planning process. Before you even make your first holiday purchase, you need to set some boundaries. For instance, do you know how many gifts you need to buy for each person on your list? Try setting a one gift per person limit to avoid overspending. Most families will set a dollar limit for gifts but if it’s more than you’re comfortable spending, speak up.

There are some situations where you simply need to say “no.” For example, work gift exchanges are generally easier to opt-out of than family ones. After all, you shouldn’t be expected to participate in every social event and gift exchange happening in your network. Dropping a few of them will not only save you some money, but it will also help make Christmas less stressful.

Offer Your Skills/Time As A Gift

The holidays are a time for giving, but your gift doesn’t need to be something you purchased. Sharing your skills or time as a gift is both thoughtful and affordable. Maybe someone in your family is starting their own business. If you’ve got some web or design skills, maybe you can offer to help set up a website for them. Can’t think of any skills you could donate? Offer your time instead.

One creative idea is to put together a book of tasks you’d be willing to help with and gift that. These could include things like housecleaning, dog walking, lawn mowing, or snow shoveling. The best part? You’ll get to spend more time with your gift recipient (while saving some money too).

Make Wrapping Paper And Gift Tags From Scraps

One of the most wasteful parts of Christmas has to be the wrapping paper. In Canada alone, 540,000 tonnes of wrapping paper and gift bags are thrown out each year. While you can find cheap stuff at dollar stores, Americans still spend an absurd $3.2 billion on wrapping paper each year. Fortunately, it’s pretty easy to spend very little (or even nothing) on wrapping paper. All it takes is a little DIY attitude.

Old newspapers, maps, and brown paper bags can be fashioned into recycled gift wrap. Meanwhile, paper towel and toilet paper rolls can be used to wrap small, oddly-shaped gifts. Gift tags are another thing you should never have to buy, as you can make some just by cutting up some scrap paper. Basically, if you can get over your wrapped gifts not looking “Christmasy” (read: a mess of golds, reds, and greens), making your own stuff can cut your holiday costs by a surprising amount.

However, if you decide you’d rather buy wrapping paper than spending the time making some yourself, just be smart about it. Load up after December 25th when stores put all the Christmas stuff on clearance. If you time it right, you can have enough wrap, tags, bows, and tape for the next several years at just a fraction of the price.

Send Digital Christmas Cards Instead Of Print

In our digital age, physical greeting cards remain a surprisingly popular holiday tradition. Taking the time to send a card through the mail to friends and family shows that you’re thinking of them at a busy time of year. Depending on the card, it’s also something people can hold on to and cherish for years to come. While there are certain situations where a physical greeting card makes sense, in most cases digital cards are a better alternative.

Sending a card through the mail not only costs money, but it’s also wasteful too. Think of your own life: how many Christmas and birthday cards have you had to throw away over the years? As much as we like to think people are holding onto the cards we send, the truth is most will end up in the landfill. With the number of great digital Christmas card services out there (some of them free!), you can easily cut down on your expenses and carbon footprint by avoiding the post office this year.

Spend Time At Free Community Events

The holidays aren’t just about giving and receiving gifts, of course. More than likely, you spend a good chunk of your holidays each year getting together with friends and family. Unfortunately, especially in the case of friends, these gatherings often take the form of dining out at restaurants. That can get quite expensive. Instead of grabbing drinks with friends, why not invite them out to attend a local community event with you. More than likely, there are a ton of great events being hosted in your area every week leading up to Christmas. A good number will be free (or very cheap) to attend.

However, community events don’t have to just be Christmas markets and local theater productions. Visit a local seniors’ home and sing some carols with a group. Volunteer your time at a local soup kitchen. Being charitable during the holidays doesn’t always have to involve a monetary donation. Investing time in your community is a great way to give back that will also keep you busy and away from places like the mall, where you’ll just be tempted to spend more money.

Re-Gift (Seriously)

Regifting has long been a cultural faux pas. However, under the right circumstances, it can be both thoughtful and thrifty. As Dave Ramsey writes in his blog post “10 Rules of Regifting,” the gift needs to make sense for the recipient. If it’s not something you would have gone to the store and purchased for that person, you probably shouldn’t give it to them. Likewise, you shouldn’t regift a gift you didn’t like. It’s not only inconsiderate, but there’s a good chance the new recipient won’t like it either.

Books make for some of the best regifting ideas, as it’s a great way to share something that’s meaningful to you with someone else. Try writing a personalized message in the front cover to make the gift extra special. Other great items include clothing (still in good condition of course!), wine and spirits, toys, candles, and fragrances.

Man Upset Looking at Bills with Christmas TreeShutterstock
Nick Steinberg

Freelance Writer

Nick is a writer based in Kitchener, Ontario and has worked in online publishing since 2013. Follow him on Twitter and Instagram @Nick_Steinberg.


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