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5 Tips for Having a Happy Debt-Free Holiday

5 Tips for Having a Happy Debt-Free Holiday

‘Tis the season for giving. It’s also the season many Americans get in over their heads and spend more than they should. How much are people spending? According to the American Research Group, the average U.S. shopper spent $929 during the 2016 holiday season, and the accounting firm Deloitte is forecasting a consumer holiday spending increase of between 4 and 4.5% over last year.1
 
Consumers are also using credit cards. A MagnifyMoney survey found that in 2016, consumers who took on debt, added an average of $1,003 in new debt during the holidays and that almost half would need four months or more to pay it all off.2
 
If those numbers fill you with holiday fear instead of cheer, don’t worry. There are plenty of ways you can celebrate the season while keeping your spending under control. Reduce stress and the risk of a post-holiday debt hangover with these tips for managing your money and cutting back on expenses:

  1. Create a holiday budget

  2. A holiday budget can help you determine how many expenses you expect to have during the season and how much money you will be able to allocate to each of them. The first step toward developing a holiday budget is to list out all your anticipated seasonal expenses. List everything-both major and minor expenses -including gifts, cards, gift wrap, decorations, travel, entertaining, holiday tips, etc.
     
    After itemizing your expenses, decide how much you will be able to comfortably spend using cash or a debit card. The goal is to get through the season without incurring additional credit card debt or dipping into an emergency savings account. Start with an overall holiday spending amount, and then break down the costs by category. This budget will be your game plan for the season. Refer to your budget whenever you shop and update it as you make purchases. If you overspend in one area, get back on track by spending less in another. Sticking to your budget will help you avoid overspending so that you can ring in the new year without financial regrets.

  3. Research and comparison shop

  4. Whether you’re purchasing gifts or a vacation getaway, it pays to do your research.  Scour your newspapers and mail for sales and coupons.  Comparison shopping engines like GoogleShopping, NexTag and Pricegrabber make it easy to compare prices online. Be sure to factor in taxes and any applicable shipping costs.  
     
    To find the biggest deals being offered by retailers, check out DealNews.com, Offers.com, GottaDeal.com and other websites that compile the hottest discounts of the day.
     
    If you plan on being one of the 150+ million consumers who plan to shop online or in stores on Black Friday, the day after Thanksgiving, be sure to visit BlackFriday.com.  This website features Black Friday ads and sales as they are announced, as well as Cyber Monday deals.

  5. Don’t pay for shipping

  6. A great online deal is not so great if you have to pay an exorbitant shipping cost. Try to look for free shipping whenever possible. You can also take advantage of Free Shipping Day. This one-day annual event is when thousands of online retailers offer free shipping plus a guarantee that your package will arrive by Christmas Eve. This year, Free Shipping Day is on December 15.

  7. Be a savvy social media user

  8. Sure, social media is a fantastic way to connect with friends and stay on top of trending cat videos, but it’s also an excellent resource for finding shopping deals.
     
    Follow your favorite stores and brands on social media and sign up for their email lists. Friends, followers and subscribers are often the first to learn about sales, special offers and new markdowns and may also be given access to exclusive coupons. Sometimes retailers will offer a discount if you “check in” to their stores. 
     
    Not sure what store has what you need?  You can also search hashtags on Twitter and Instagram to find money-saving deals. For example, #camerasale or #camera #sale.

  9. Trim your family gift list

  10. If you typically exchange gifts with a large group of extended family members, one of the most obvious ways to reduce your holiday expenses is to cut down your gift list. But this can be tricky. No one wants to look like the family Scrooge during this joyous time of year.  Here are three strategies for doing this tactfully and successfully:

    • Have a discussion with the adults and ask if everyone could consider giving gifts to just the children. Does your brother-in-law really need another shirt featuring his favorite sports team?  Limiting the gifts to the youngest family members can dramatically reduce the financial burden for everyone, not to mention the stress and time of trying to find that “perfect” gift.

    • Another idea for cutting back the family gift list is to have a Secret Santa gift exchange. Everyone draws a name randomly out of a hat. Each participant keeps the name they pulled a secret and they buy a present just for that one person. You can set a gift price limit as well.  At the holiday gathering, everyone can open their gifts and have fun trying to guess who their “Santa” was.

    • Suggest starting new family holiday traditions that focus on experiences rather than gifts. Volunteer at a soup kitchen, visit an animal shelter, take a drive to view holiday lights, go ice skating, bake holiday desserts, etc. These special moments can help strengthen family bonds and will create cherished, long-lasting memories.  

    While this subject may be difficult to approach at first, you might find that other family members share your concerns.  They might welcome the opportunity to simplify their gift-buying obligations.
     

Staying within your budget doesn’t mean forgoing holiday fun and festivities, but it does require planning and perseverance. Retailers are doing everything they can to lure you in to buy-buy-buy. Try to resist the temptation. After all, the season should be focused on celebrating the holidays and spending meaningful time with loved ones…not trying to cope with the financial strain. Keep an eye on your long-term financial goals. That is one of the smartest gifts you can give yourself.
 
NOTE: The third parties mentioned above are not related to United Bank and United Bank is not responsible for failure of products/services offered by the third parties. The links to third parties are provided as courtesy and United Bank doesn’t recommend or endorse the content of the third party sites.
 
1Vesilind, Emili. (September 21, 2017). Deloitte Forecast Predicts Robust Holiday Spending. http://www.jckonline.com/editorial-article/deloitte-forecast-predicts-robust-holiday-spending/
 
2Woodruff, Mandi. (December 29, 2016). Americans with Holiday Debt Added $1,003 on Average This Year. http://www.magnifymoney.com/blog/featured/americans-holiday-debt-added-1003-average-year/