Are you starting to get a little nervous about the Christmas holiday coming up and running short on cash for all the expenses? You can avoid the stress by doing a bit of planning and have a fantastic Christmas holiday! Even if you’re a bit short on the green stuff, you can still have fun and spend money, prudently rather than foolishly, and all without a credit card.
Don’t get caught in the credit card trap! If you spend $1000 on Christmas expenses this year at 18 percent annual percentage rate (APR), and you pay the minimum payment of 4 percent due each month, it will take you YEARS to pay-off the credit card.
To avoid the pre-Christmas budgeting depression and post-Christmas credit card bill surprises, start planning now by following this simple financial roadmap. Understanding what you have, drawing up an all-inclusive list of needs and wants, shopping for bargains early, avoiding credit cards, and tracking each item will keep you focused on positive cash flow – and that can increase your Christmas spirit!
1. Determine how much cash you can spend
If you’re on a budget or spending plan, then you probably know already how much you can afford to spend on the Christmas holiday and have budgeted for it all year long, a little bit at a time. If not, it’s time to figure it out now so you can avoid paying on your credit card for months or years to come.
To get started, make sure you know what income is coming in. Calculate your net income from now until Christmas and subtract out all the regular debt, expenses and discretionary spending. Hopefully you have a surplus so that you can adequately enjoy the holiday season and move on to step #2.
If you don’t have a surplus, then you’re already spending more than you make and extra cash for Christmas season will have to come from new sources such as a serious cut back on your discretionary spending, selling some unwanted items, or perhaps a temporary part time job to generate some income for Christmas expenses. Many establishments hire part time help for the holidays.
2. Make your list and stick to it!
Include everything on your list such as charitable giving, gifts, decorations, entertainment, extra food and drink, travel, clothing, greeting cards, postage and wrapping paper and accessories.
Your list should include people you want to buy gifts for including family, friends, mentors, teachers, service providers, employees, colleagues at work, etc. Determine who is getting what, the amount you’ll spend, or whether it’s a “card-only” situation.
For those you are buying gifts for, and If your cash budget is tight, then be very realistic with the dollar amounts. Tell your children early on there’s a limit this year on quantity and size of gifts. Opt for quality time and new family Christmas traditions instead of expensive gift giving. There’s nothing wrong with living within your means and buying less expensive gifts. It’s very chic these days!
3. Start shopping early and shop smart
There’s never been more opportunities to save money. Shopping online has exploded with coupons, groupons, and “push” email alerts from major stores to let you know in advance what is going on sale and when. Take advantage of these offers! Sign up early for email alerts and check daily for new deals. Many stores offer free shipping too!
Keep your emotions outside the store. Shop with a mission to complete your list and nothing more. Don’t get sucked in my sales signs if those items are not on your list. Take your list with you and use it to control what you’re buying and how much you can spend for each item.
4. Use a daily tracker so you don’t exceed your plan
Keep track of everything you spend! Write each purchase down on a separate piece of paper summarizing what you’ve spent that day. Add up the amounts at the end of each week. Don’t wait for the debit card statements to arrive. It will be too late if you overspent!
Monitor the spending each week against your master list and check off the items paid for. Estimate what cash is needed for the remaining items. Make any adjustments necessary to stay on track with your plan.
5. Remember it’s Christmas and it’s not about us, the gifts, or the spending!
Doing something good for someone can really inspire you during the Christmas holidays. Maybe it’s a friend or family member who is ill that you spend time with. Working a soup kitchen, delivering Thanksgiving baskets, or volunteering for a charitable fund raiser are all great things to do and will take your mind off budgeting and spending for awhile.
Playing a new game with children or reading stories together can mean the world to a child. Writing out the Christmas cards together will help inform your children of who their long lost relatives are. Talk about the old days of what you did with them during Christmas when you were a child. It was probably a lot different than today!
Getting back to the basics of what the holiday season is all about by creating memories with your loved ones could reap years of benefit in your relationship and help restore the Christmas inspiration.