If you want to avoid going broke this Christmas season, you need a good plan! Part of having a good plan is to know what and what not to do with your hard-earned money.
Ah, Christmas! It’s the perfect time of the year you can justify any outrageous consumer spending. When you’re in the mood for gift-giving, you can easily go nuts with your holiday shopping!
Not only does this season make you feel a sense of guilt and obligation to give gifts, but it also makes you spend more on food, booze, and parties. These leave you “broke” at the start of the new year.
By the time you open your first credit card statement of the year, you’ll be dealing with a massive credit card bill. Moreover, it can be difficult to remember how you got there!
Where’s the happy new year in that?
If you want to avoid going broke this Christmas season, you need a good plan! Part of having a good plan is to know what and what not to do with your hard-earned money.
I used to shop at the last minute and just throw things in the cart without any careful consideration as to how that shopping spree would hurt my financial health. Without a carefully-laid out plan and proper budgeting, I almost blew my personal savings account.
When I decided to take charge of my finances and make our financial health a priority, I learned to plan for this time of the year. Planning gives you more time to shop around and compare prices. Furthermore, it helps you curb your spending and be more thoughtful about the gifts you give.
Do you want a Merry Christmas and a debt-free new year?
Then be sure to avoid these nasty shopping habits to avoid going broke this Christmas:
1. Buying gifts for everyone
Most of us can’t afford to buy gifts to give to every member of the family tree, much more to all of our godchildren. But we do it anyway out of cultural “obligation”. However, buying presents for everyone isn’t necessary or expected.
If you want a fun, budget-friendly Christmas party with your family, maybe it’s time you stop giving something to everyone. You can instead have a family drawing/ Secret Santa or what Filipinos call Monito-Monita. You just basically draw people’s names out of a hat or bowl. Then, you’ll be responsible for the person whose name you have drawn. Easy-peasy, right? You are only obliged to buy 1 gift. Only one!
However, if you are really intent on buying everyone presents, then you need to carefully plan it all a few months ahead! Save early and save often, make a list and then get down with creating your Christmas budget. More on that later.
2. Christmas shopping without a plan
If you’re keen on buying things for the people closest to you this Christmas, then make sure to do it with a holiday budget. Miss that and you’re setting yourself up for a financial disaster. It’s very easy to overspend if you don’t set limits as to how much you should allocate for gift-giving. The mall is a black hole that will suck you in and spit you out on the other side all stretched and wobbly in terms of your financial health.
Figure out how much money you can afford for the holiday season. Then, make a list of everyone who will receive your gifts, as well as all the other things you need to purchase during Christmas. When deciding on how much to spend on each person on your list, write down ideas on what item to give to that person based on their hobbies or interests. So, the next time you shop, you can compare prices for items included in your Christmas shopping list. Also include other things in your budget like food, gift wrappers, decorations, etc.
If you want to be spot on with your gift shopping budget, use cash envelopes! You need actual cash for this to work. It can be too easy to over budget when you swipe your credit card to buy presents. Save cash over the next few weeks and place some amount in cash envelopes designated by names included in your list. Then, buy gifts using the amount you put in each cash envelope. The amount you spend for each person should be no more than the amount you put in that person’s cash envelope. If you under budget, congratulations! You can add the leftover to your Christmas party food budget or give it to charity!
3. Getting yourself something nice…once, twice or thrice!
While gift shopping for other people over the holidays, it can be tempting to also get something for yourself. Some do this every time they pick up one for a loved one. This is why having a plan of attack before going out to the mall is crucial so you don’t get into any unplanned purchases. If you are dying to get your hands on an item that you just saw, wait at least 24 hours and see if you still want that item the next day. Most probably, you won’t.
4. Believing expensive gifts are better
Some people think that the more expensive the gift is, the more significant it will be for the receiver. And a lot of people will go into debt to afford them even when it’s out of what they can actually afford. I was guilty of giving extravagant gifts. I wrongfully believed I would become the most thoughtful person in the room if I give something flashy.
Turns out, that’s not always the case.
The best gifts are those that are simple and heartfelt. If you truly don’t want to spend a lot this season, focus more on meaningful personalized gifts. It doesn’t matter if it’s a nice coffee mug with your dad’s photo on it, as long as it would mean a lot to the person on the receiving end. Are you buying that expensive watch just to make your mom happy? Or is it because it will make you feel generous?
One of the things you can do to avoid going broke this Christmas is to not copy the Joneses’ way of giving gifts. Yes, they go all-out with their gift-giving game, but some of them are actually broke!
Related Post: Stop Keeping Up with the Joneses – They are probably BROKE!
5. Not comparing prices
Another holiday misgiving most of us do is failing to compare prices. Just because the establishment says something is on sale doesn’t mean that it is the best price you can get. I experienced this when I shopped for an item online once. I found the item “on sale” on an Instagram shop for Php 4900 ($98). However, I found a direct supplier of that exact item who only sold it for Php 2100 ($42). What a big price difference!
Hence, if you spend some time comparing prices and searching for the best deals, it can result in huge savings! There are free apps out there that help you compare prices of the same item. They will match competitors’ prices and save you time in the process.
6. Getting lured into store sales
How many of you have jumped right into the latest sale on Shopee/Lazada and Amazon? A lot… most probably.
Shoppers just have this fear of missing a great deal when one of these online stores declare an upcoming huge sale. Thus, they are easily lured when a lot of items on these stores have slashed prices.
But do you really need that $3 Bluetooth speaker when you don’t listen to music at home that much?
Ask yourself if you would buy an item at its regular price. If not, you don’t need it.
I’m not saying that you should forego shopping when a store is holding a sale. If an item on your list is on sale at a particular store, and you’ve already checked out other stores for the price, then go for it. If an item is not on your list and not in your budget, it’s not something you should be buying at the moment, even if it’s on sale.
It’s still possible to love this season and participate in giving without breaking the bank. If you truly understand the meaning of Christmas, then you wouldn’t have to overextend yourself just to feel very generous. Christmas is not just about what you are giving, but the love and thought that goes behind it.
The decision on how you must spend your money should be yours alone to make. Don’t get caught up on things just because our culture and peer pressure goad us to spend more this time of the year.
The goal is to have a great time with family and friends and avoid going broke this Christmas and new year. You don’t have to be in a shopping frenzy and be in a lot of debt after. That’s just plain stupid. There’s nothing merry or happy in that!
Isn’t it great when you spend this joyous time of the year without worries or regrets?
How about you? What broke-proof Christmas shopping tips do you know and will be doing this year?
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