Budget for holiday spending to avoid debt

With Thanksgiving falling later this year and December well underway, we hope we’re not too late with this warning: Don’t blow your household budget at Christmas! Even if you did spend your wad during the Black Friday sales, take a deep breath now and assess your financial situation.

Generosity is great! However, if you give at the detriment of your financial stability, in the end that’s no gift to anyone! We see it time and again the negative affects of overspending at Christmas. It leads to unpaid mortgages, rents, heating bills, credit card bills and car loans come January. That’s why we want to encourage everyone to be wise with their money and to also shop locally whenever possible.

While shopping online is quick and easy, going to local stores and sellers can provide unique gifts and often superior customer service! Think creative and local!

For instance, what about buying someone a gift certificate to a local restaurant? Someone else on your list might appreciate a service such as a chimney sweep service, a window washer (to save for spring) a handyman or painter. What about a photo session from a local photographer, a piece of art at one of our many galleries or tickets to a local play or concert? Or our favorite- a ladder standoff to attach to the family extension ladder and keep every user much safer when getting on the roof, cleaning out gutters and hanging lights on the house. That’s a gift that keeps on giving!

AVOIDING DEBT

Even while keeping your purchases local, consciously being mindful of your overall spending is the one key to a great holiday!

As we said, we can recall family after family that has gone into debt for the holidays and not found their way out for years or ever. Is that extra toy, TV or gadget worth putting you or your family in financial peril?

If you didn’t plan and budget for the events and expenses that will occur in your holiday season, come January and February, when the bills roll in, the festive glow could end abruptly and negative housing issues could take their place.

If things are getting financially tight or the family-wage job is uncertain – no “deal” in December will be worth the stress of not being able to pay your mortgage on time or creating a credit card debt that “keeps on taking.”

It is generally accepted by bankers and financial counselors that households should keep their overall debt at less than 45 percent of their gross income. Our housing counselor recommends a maximum of 45 percent of “take home” pay as safer and more comfortable for most of us.

And, when overspending leads to not being able to pay bills, rent, mortgages, etc. on time, it creates a false economy. In other words, it doesn’t help the economy if you don’t pay or worse, go bankrupt!

CREATE YOUR BUDGET NOW

There can be light in this tunnel, however, by starting immediately to establish and fund your holiday budget, including food, gifts and travel. Establish your family’s limits, keep those limits realistic, stick with your plan and stay under the 43 percent of income ratio as a guideline that will ensure a successful, stress-less post holiday season!

One hint to keeping within your budget is to make a pre-shopping plan for your purchases, call around locally for what you are looking for first, and then make a planned shopping route. (Some stores will price match, so the time spent in research can be money in your pocket.) This will prevent wandering around in a holiday fog getting nothing done, wasting money budgeted for gifts on expensive gas and lunch out! If somethings can’t be found or ordered, then the internet may solve the issue.

WHEN MONEY IS TIGHT,

GET CREATIVE IN GIVING

Maybe this is the year to draw names for holiday gifting instead of buying for all 40 cousins or all five or 10 coworkers. Or, maybe the extended family could decide, together, not to buy for each other, but to “adopt” a family through one of the many local not-for-profit organizations, such as the Salvation Army, the United Way, or your church or service club.

Yet another way to save money, but stay in the giving spirit, includes changing your focus as a family from things to time. Spending time together making gifts, visiting a nursing home, volunteering to serve dinner at a mission, or finding a needy neighbor who would love having a few chores done, makes for lasting memories for all involved.

Then there are ‘giving coupons’ for babysitting or house cleaning, car washing or cookie baking.

Many aunts, uncles and grandparents would forego another expensive gadget or sweater for a plate of your best prepared cookies or a poinsettia combined with a great hug, thoughtful visit and helpful follow-up doing some household chores.

Or, how about giving your kids or grandkids an experience? It doesn’t have to be expensive and can start with getting out some of those old board games in the closet or putting on their favorite movie and popping some popcorn and actually watching it with them! Or perhaps, an evening of bowling, or lunch on the beach. (Keeping them for an evening or overnight, gives their parents a gift of free babysitting too!)

Starting a new tradition with the children’s input will become part of their cherished memories long after the toys are broken and discarded.

Holiday feasts are most everyone’s favorite tradition. Creating a no-stress, festive and fun event, within everyone’s reach makes it all the more special. A warmly decorated home, holiday music, lively conversations and fun games all contribute to a festive holiday mood and cost nearly nothing.

Hope this helps to spark a new idea that keeps on giving throughout the year.