How to Have a Financially Stress-Free Holiday Season

Bad financial decisions during the Holiday Season can wreak havoc on a family’s finances. The principal reasons for this stress are spending too much (no budget for giving), ballooning balances on credit cards, and a sense of entitlement. After all, it’s Christmas!

The credit card bills that come in January will be a stark reminder of the undisciplined approach to a Christmas budget the month before. Sadly, many Americans use their tax refund to pay down the credit card debt, assuming they will get a tax refund at all!

Even usually frugal people can get caught up in the season! So here are some tips I’ve used at Christmas to keep the Holiday spirit under control when it comes to gifts, etc.:

  1. Honesty is ok, especially during the Holidays. A heartfelt handwritten Christmas or Hanukkah card, letting folks know you aren’t in a position to buy gifts can be appreciated more than a material item that will be forgotten in the months ahead. Sentimental gifts like this are always a hit.
  2. Absolutely set a reasonable budget – and don’t go over it.
  3. Do not put Christmas on your credit cards – unless you can pay them off in the next statement you receive.
  4. If you’re crafty or good in the kitchen, create something inexpensively yourself to give others. Heck, even a batch of homemade Christmas cookies would mean more to us than new necktie!
  5. Provide a task as a gift instead of a purchase. Your grandmother’s yard needs the leaves to be raked? Go rake her yard and let her know that is your special Christmas gift to her!
  6. How many Christmas’ did I experience where I bought the latest toys on the market for my children, only to have them spend more playtime with the boxes they came in? The younger your children, the less they will know or understand what the hottest toys are for the season.
  7. Shop for toys at second-hand, resale or Goodwill stores. Many toys that are donated are in great condition (See #5 above…) and can be bought for pennies on the dollar. Put some great wrapping paper on them and they will be just as excited as if they were new.
  8. Gift cards make giving easy for the giver for older kids or teenagers – or for anyone hard to buy for. The beauty of gift cards are most allow you to pick a dollar amount that fits into your budget. The truth is for these hard-to-buy-for recipients is they likely enjoy the freedom of choosing their own gifts.
  9. Re-gift. Yes, I said. That gift you received at the office that you will never use, give it to someone else.
  10. If you have pressure from large extended family members to buy gifts for them and all their kids, consider doing a white elephant type gift exchange that only requires you to buy one gift. We have even had the extended family children to a separate white elephant exchange. The stress put on families to buy for all the siblings’ and cousins’ kids can be overwhelming.
  11. If you plan to go on a Holiday Season vacation, make that itself the gift for your family members.
  12. Wait until the season is over to buy Christmas decorations. They will be half price or less.
  13. Stop feeling obligated to buy gifts for everyone. You simply can’t do it and likely stay in budget.
  14. Consider teaching your children to give away the toys they no longer play with. Have them help you take the toys to a local firehouse, Goodwill or other collection places. Teaching them that their generosity will mean a less fortunate child will have a Christmas present after all is a wonderful lesson. (You can even bribe them with stories about how Santa Claus favors those who give away toys that are no longer used or needed…)
  15. Be honest with your spouse about your current financial situation and avoid making one or the other uncomfortable by outspending them on a gift between you both. Set a budget limit for gifts for each other!

Don’t forget what the Christmas season is about. It’s about enjoying the birth of Jesus Christ and the warmth and love of our families together.

Have a very Merry financially stress-free Christmas!

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