Making Good Money Choices when Celebrating the Holidays

Written by: Sylvia Ruiz, Graduate Student Intern

It’s Christmas! Yay! You have been waiting all year for this day to come. You love everything about Christmas, the decorations, the lights, the food, the music, the family time, the gifts. And you LOVE giving gifts!

You want everyone to have the perfect gift, because giving gifts is your way of showing your friends and family how much you care about them. And every year you are know for giving the biggest and most expensive gifts. All of your friends and family look forward to your gifts!

But, you also know that you don’t want to go into more debt or not be able to pay your bills next month. You remember how bad it was last year in January, you were so stressed out because you had to borrow money from family, or had to get that Pay Day loan, and that set you back all year. You finally got out from under that in July, and it felt like it would never go away. 

So going into debt isn’t a good idea, but you also want your family and friends to know how much you care about them. 

Holiday spending can be a scary or even daunting task. It can be very difficult managing your finances around the holidays, especially if you already have a tight budget to begin with. It is very important that you do not burden yourself by overextending your financial budget, only to create more headaches and stress. Here are a few tips to help you make better money choices to hold yourself accountable and still enjoy the holiday season.

Make a holiday gift budget and stick to it.

Instead of impulsively buying gifts or waiting until December to start shopping for all the gifts you would like to buy, start planning as soon as possible, set a spending limit, and track your spending. Consider who is on your gift-giving list and do not deviate from this list or budget.

Give gifts without suffering from a post-holiday financial hangover.

It goes without saying that your family and friends are truly priceless, but that does not translate to the gifts that you buy them. Consider giving someone something you made yourself, like baking some cookies for example. This still shows that you thought about them and helps keep spending to a more minimal cost, rather than an expensive gift.

Shop smart.

Take advantage of Black Friday and Cyber Monday deals, but make sure it is truly a good deal that you cannot pass up. If you must use your credit cards, use one that has perks like cash back or rewards to make the best of those purchases. If you have a hard time controlling your spending, pay for things with cash or gift cards, so you do not run up a big credit card bill.

Once the holidays are over, recheck your budget and see how well you managed to stick to it. If you stayed within your limits in every category, congratulations – you’ve figured out just what works for you. If you went over budget in some categories, that’s a sign you need to tweak your budget next year, allocating more money to those particular categories ahead of time. You can  adjust your household spending to set aside a little money out of each month’s budget for next year’s holidays. By getting started early, you can give yourself a lavish budget to work with next time the holidays roll around.

Maybe money is just not an option this year. Here are some alternative ideas to giving expensive gifts. 

Be Creative.

Give your family gifts that you made. Do you like to bake? Bake some bread or cookies. Do you like to paint? Paint them a picture. Write? Write a poem or story. Woodworking? Crochet? Sewing? Do you have a service you can provide? Give them a coupon for one free of that service, ie, like babysitting, house cleaning, lawn mowing. Use your own creativity to give a gift. Giving a gift that is from your own talents and skills means more to people than how much money you spent on them.

Be Honest.

It’s the thought that counts, right? Be honest with your family, if you don’t have the money this year, just tell them that. Share with them that you want to give them a gift, but you don’t have the extra money for a gift. Write them a nice note or card telling them how much you care about them. Gifts don’t need to have a monetary value attached to them. Gifts can be thoughtful items that you spent your time and energy on.

Remember you don’t want to break the bank this Christmas and end up struggling in the new year to pay your bills. Pay attention to your budget, and give gifts that are thoughtful and caring. You might be surprised how creative you can be on a small budget, and your family still feels loved.

Here is to a Happy and Stress Free Gift Giving!

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