Keeping Christmas Budget-Friendly

Christmas shopping online

[Photo Credit: Flickr/Mike McCune]

The Christmas holidays are officially upon us; halls are decked, carols are on the radio, trees are being decorated, and retailers are welcoming the biggest shopping time of the year. Gift giving has become such a fundamental part of the holiday season that the mall has become a vital part of the entire Christmas experience — whether you’re there to visit Santa with the kids, grabbing gifts for friends and family, or just walking around to take in the displays and decorations.

However, the biggest shopping season of the year also means the biggest spending season of the year, and it’s not surprising that Christmas often leaves families with a mountain of debt and expenses. While it’s easy to get swept up in the holiday spirit, no one wants to have a rude awakening in January; and as much as we all promise ourselves that we’ll be more careful with our money in the new year, that resolution has usually been long forgotten by the time December rolls around again. With these budget tips, you can have a magical Christmas while also keeping your finances secure into the New Year.

Tip 1: Avoid The Credit Card Bill Shock

Christmas spending ends up becoming overwhelming for two reasons: because of the way in which people tend to shop for gifts, and a very fundamental issue with how the human brain thinks about money. When we spend a large amount of cash all at once, it’s easy for us to gauge how badly it’ll hit our bank account; after all, we can do the mental math subtracting one number from the other. However, most Christmas shopping is done in chunks as you go to a long list of stores and get just a few items at each one. Despite the fact that you may be spending that same gigantic sum of cash, your brain just doesn’t clue in to how much you’ve really spent because it sees a bunch of reasonable $50 purchases and thinks you’ve just spent only that. We are very bad at maintaining those sorts of running totals in our minds, so it’s very easy to lose track and overspend.

In order to avoid the shock of seeing your credit card bill the day after Christmas, make a very specific list of gifts you plan to buy and do research ahead of time to figure out how much you’ll end up spending. Seeing the costs ahead of time as one lump sum gives you a moment to think about how much you can actually afford to spend. Additionally, consider using cash. When you see the money actually leave your wallet, you’ll get you a good idea of what you’re spending.

Tip 2: Stay On Target

For big-ticket items, shop around on a variety of websites and outlets to ascertain which spot has the best deal, and then trust your instincts when you’ve found the sale price that works for you. Don’t be caught up in trying to find the absolute lowest price possible, or you’ll end up missing out entirely. Instead, decide what your ideal price would be — keep it realistic — and then take the closest offer.

Tip 3: Go For Quality Over Quantity

While we all love the classic image of a Christmas tree stacked with presents underneath, the reality is that those presents are expensive. Sit down with your family and discuss having a minimum present for each member — one or two big items, or a handful of smaller ones, but try to focus on things that will be meaningful expressions of love rather than the hottest toy or fanciest gadget. Give your kids limits on how many gifts Santa can bring in his sack this year. It’ll make the gifts more meaningful and be easier on your wallet.

Tip 4: Arrange A Budget-Friendly Celebration With Your Friends

While your family’s gifts may be perfectly within your budget, things often get more complicated when you’re buying gifts for everyone you know. So instead of swapping gifts with friends and coworkers, arrange to just send cards to one another instead, or agree to come together for a big potluck celebration of each others’ company. While it can feel rather Scrooge-like not to buy presents for your social circle, at the end of the day it may be more practical.