Beware of Holiday Spending

Christmas time is upon us this month, but the marketing of Christmas started months ago. Everyday we will be given a chance to own or give the latest knickknack, gizmo, sweater, etc. Nobody wants to be known as the Grinch, but our personal consumer debt will swell if we adopt the “spend now and worry about it later” philosophy.

So, what advice can we give ourselves and to others?

1. Remember to make celebrating the gift of our Savior the focal point of all that we do!

2. Do a spending autopsy of last year’s expenses. What did last year’s “Merry Christmas” cost us and how did we finance it? Go back to last year’s credit card statements and compare your November through February balances. Were you able to pay off all of the new charges before the next statement? According to NerdWallet nearly 30% of those surveyed are still paying off their debt from the previous year. Scripture tells us that a borrower is slave to the lender (Proverbs 22:7).

3. Check your available savings. How much have you planned/saved for your Christmas? Are you expecting a year-end bonus or tax refund to cover your spending? Make a commitment to not incur any new debt or spend money you have not yet received. Keep your hands off of your emergency fund. In the NerdWallet survey, 10% say they will spend their emergency fund this year and 9% say they will prioritize gift buying over paying some regular bills like rent and utilities.

4. Make a list. Based on what you did last year, what are your plans for this year? Count your travel, spike in groceries, special events, as well as the gifts for the people on your list. Are there less expensive alternatives?

5. Set a cap. It is easy to get swept along by the Christmas spirit, but if you set and stick to your limit, you can make wise choices. Find a way to keep the balance in front of you. Some people will allocate money into envelopes. Some will purchase a pre-paid card with the designated amount. Make a chart. Have a family finance committee report at your evening meal.

6. Keep notes for next year and start saving!

7. As appropriate, involve your children so that they can learn sound money habits. Need some help to know how? Check out our Trusted resource page.

When your outgo exceeds your income, then your upkeep will be your downfall.