Yahoo Finance 13 Frugal Tips To Limit Your Holiday Debt Early
As the holiday season approaches, the twinkling lights, festive decorations, and heartwarming traditions can easily tempt us to overspend. According to recent data from the National Retail Federation, even with inflation and economic worries, winter holiday spending is projected to increase over last year’s totals and rise to $967 billion.
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“Americans already owe more than $1 trillion in credit card debt, yet many people are still charging on their cards,” said Lynnette Khalfani-Cox, a personal finance expert and author of Bounce Back: The Ultimate Guide to Financial Resilience. Khalfani-Cox once had $100,000 in credit card bills before paying her debts off and turning her financial life around.
Fortunately, she knows you can celebrate the season without breaking the bank. Here’s a sleighful of frugal tips to keep your holiday budget intact and your winter spirit soaring.
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The Holiday Savings Account Miracle
Avoid a post-holiday financial hangover next year by planning ahead. Open a separate holiday savings account at the beginning of the year and contribute a small amount each month. When the festive season arrives, you’ll have a budget-friendly stash ready to make your celebrations merrier.
All-Inclusive Budget Mastery
“Too often, people make holiday budgets that only take into account money they’ll spend on gifts,” said Khalfani-Cox. This is a huge mistake.
Instead, create a comprehensive budget that includes all aspects of holiday spending, from gifts and decorations to travel and entertaining. Having a clear overview will help you allocate funds wisely and avoid unexpected financial surprises.
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Crafty Gifting on a Budget
Who said heartfelt gifts must come with a hefty price tag? With DIY gifting, handmade presents not only carry a personal touch, but they can also save you a pretty penny.
Consider baking batches of your famous cookies, crafting custom ornaments, or creating a scrapbook of cherished memories. Your wallet will thank you, and your loved ones will appreciate the effort.
Secret Santa Extravaganza
Gifts are an essential part of holiday fun, but the costs can quickly add up when you’re buying for everyone. Instead, opt for a Secret Santa exchange approach within your family or friend circle.
Draw names to determine who you’ll be buying for, and set a budget that suits everyone. It adds an element of surprise and ensures that everyone gets a thoughtful gift without straining anyone’s finances.
Credit Card Perks Wonderland
Even as you avoid credit card debt, you can explore the winter wonderland of credit card perks. “If you’re going to whip out a card to pay for holiday items, make sure you use the right card,” Khalfani-Cox urged.
Some credit cards offer price protection, which means if you purchase an item and its price drops, the credit card company may refund the difference. Other cards may offer cash-back benefits. Utilize these perks to ensure you get the best deals on your holiday purchases.
Plane Tickets and Accommodation Prowess
Plan ahead for travel expenses by keeping an eye on airfare trends and booking flights during off-peak times. Additionally, consider alternatives to hotels, such as vacation rentals or staying with friends and family. Planning ahead not only ensures availability but can also save you a considerable amount.
The Art of Upcycling
This season, embrace the eco-friendly trend of upcycling. By thrift shopping for decorations, tableware and even special vintage gifts, you not only save money but also contribute to reducing waste.
Experience Over Excess
Shift your focus from material gifts to memorable experiences — and think of what you have to give. Offer a cooking class for your nieces and nephews, pet-sitting for a friend, or plan an outing to a local museum or nature spot. Not only are you offering a unique and cherished experience, but you’re also avoiding the clutter of unnecessary possessions.
Free and Fabulous Festivities
Think beyond pricey outings and embrace the joy of free or low-cost activities. Host a cozy movie night at home, an outdoor adventure, or plan a game night with friends and family.
“Building connections with the people you love over the holidays will be far more memorable to them, versus buying them a sweater or some other item,” said Khalfani-Cox.
Bonus Planning Extravaganza
If you’re fortunate enough to receive a year-end bonus, resist the urge to splurge on impulse buys. Instead, pre-plan how you’ll allocate these funds.
Consider directing a portion toward debt reduction, boosting your savings, or investing in experiences that align with your long-term goals.
Potluck Perfection
Hosting a holiday feast can be expensive, both in terms of time and money. Instead, turn your celebration into a potluck event. Not only does this ease the burden on the host, but it also ensures a diverse spread without burning a hole in your wallet.
Avoid the ‘One for Me’ Syndrome
When you’re out shopping, do you sometimes find nice gifts for others, but then wind up getting one for yourself too? “Sometimes, we rationalize and justify our holiday spending by telling ourselves ‘I deserve it,'” said Khalfani-Cox.
You also deserve a stress-free financial life, so Khalfani-Cox suggested taking a step back to”resist the urge to engage in ‘one for me too’ spending.”
Consider Buying Nothing
This is the ultimate hack to avoid holiday debt. More people are joining “buy nothing groups,” especially during the holidays. “It’s a powerful way to focus on meaningful experiences and human connection rather than material spending,” Khalfani-Cox noted.
In the hustle and bustle of the holiday season, remember that the true magic lies in the moments shared with loved ones — not the price tags on the gifts exchanged. By incorporating these frugal tips, you can spread joy without sacrificing your financial well-being. So, let the celebrations begin, and may your budget be as merry and bright as your holiday spirit!
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