I know this post may be a bit late for some of you, but I thought with only 8 days to go until Christmas now would be the perfect time to offer the admonition “Don’t go into debt this Christmas!”
I’m not sure about all of you, but it seems to me that the years that I have racked up credit cards debts during this season giving have seen most of the unnecessary spending occur in the last few days leading up to the holidays. I find myself buying just one more gift, or for just one additional person and by the time I’m done all these additional purchases have put me far over my Christmas budget.
There are a few ways to avoid overspending during the holidays, which ones work best are often dependant on your own personality. Here are some common tactics to help you avoid overspending on Christmas and suffering the dreaded New Years credit card hangover:
- Leave the credit cards at home. Use cash for all of your Christmas purchases
- Make a budget and stick to it. Decide how much you can afford to spend overall and then allocate that among the people on your Christmas buying list.
- Avoid the temptation to buy just one more small thing.
- Do not shop for yourself when gift buying
- Move to Thailand like I did and avoid all the Christmas shopping frenzy
Ok, I’ll admit the last suggestion is a bit extreme, but you can stay out of the malls and don’t go to online shopping sites. All it takes is a small dose of willpower.
According to the Federal Reserve, the American consumer has shed 13 percent of their debt load since the beginning of the Great Recession and is currently dropping debt at an annualized 2 percent rate. This is an excellent trend and one that needs to continue. Unfortunately, while overall household debt is dropping, consumer debts from auto and student loans is rising. Don’t fall into the consumer debt trap this holiday season by over spending on Christmas cheer.
Christmas spending so far appears to be moderate, which is a good sign. After a record breaking Thanksgiving weekend splurge, the latest Gallup poll shows that consumers will not spend much more this year in comparison with 2011. Last year consumers spent $764 on average and this year they are anticipating spending $770 on Christmas gifts. This is significantly higher than the $616 spent in 2008 at the beginning of the Great Recession, when holiday spending plummeted to a 20 year low. It also points to retail sales growth of roughly 3.5 percent, a reasonable number and in line with the average over the past decade.
While it is true that Christmas is the season of giving, we have lost the real meaning of what Christmas giving represents. It isn’t measured by the latest toys and gadgets under the tree, nor does it have anything to do with lavish holiday parties. Christmas giving is the giving of love, which costs nothing financially. Rather than worry about what presents you will be giving, focus instead on giving of yourself, not just at Christmas but all year long. My guess is that you will be richer financially, spiritually and emotionally.
