Don't let the holidays break the bank
While December is meant to be a joyous time of year full of festive occasions and anticipated moments, it can also become a source of anxiety if families do not work to maintain a realistic budget.
According to the National Retail Federation, the average holiday shopper spends at least $700 on gifts. That’s a significant chunk of change to come out of December’s paycheck.
The Odom family of Waynesville strives each year to budget for the holidays so that January and February aren’t spent playing catch up in terms of bills and savings accounts.
“We anticipate the holidays coming, so in the months prior, we start allocating small amounts of the budget towards Christmas,” said Leigh Odom, mom to Colin, 3, and Rachel, 5 months.
In the article, "Make a Budget for Christmas and the Holidays in August"(dimespring.com), author Hannah Kim suggests making a holiday budget during the late summer months before any of the holidays, including Labor Day and Halloween.
Regarding budgeting, some of Kim’s tips include: 1). Look at each month and estimate how much will be spent on each holiday during that month, 2). Do not rely on Christmas bonuses as many companies/industries are decreasing or eliminating bonuses altogether, 3). Create very specific budgeting goals (Who do you need to buy for? What are you going to buy? How much can you spend?), 4). As a family, decide on a spending amount so that no one feels guilty about overspending or underspending, 5). If a child or adolescent really wants a big ticket item, such as an iPad, have several family members go in together. Most people would rather get one item they really want than several items they don’t want or need.
“It's important to set some limits for gift purchases because it’s easy to get wrapped up in the excitement of gift-giving,” said Odom. “However, that can have pretty dramatic consequences when your family budgets month-to-month. We have limits of three gifts each. There is no need to buy a carload of gifts for one child. Three special things will make him or her happy.”
Other ways to assist in budgeting are to decrease the number of gifts bought, enjoy free or inexpensive activities together as a family, or give one’s time to a cause.
“We attend holiday events at our church, have holiday movie nights at home, and let the whole family participate in decorating. My son loves trains, so we make putting out the Christmas trains a big deal at our house,” said Odom.
Further, two additional ways to save money are to make more gifts instead of buying them or if you possess a special skills, such as massage therapy, woodworking, plumbing, skin care, etc., you could give a coupon that offers a service whenever the receiver needs it.
Just ensure that you set some parameters, such as any exclusions that apply, the duration of the service (i.e. 45 minute massage), and the expiration date for the service (i.e. good for one calendar year). This option could be a fun way to “give,” but make sure it doesn’t become another reason to stress.
Overall, the holidays are meant to be simple and special. It’s up to individual families to make that happen.
As Odom said, “Money is a huge stressor in most families, and we want to take these small steps in an effort to avoid that stress. We also want our kids to see how we handle money responsibly; planning for what we know is coming, preparing for the unexpected and avoiding debt.”