Taming the Holiday Spending Monster

When you first saw the Christmas decorations appear in the stores this year, what was your reaction—joyful anticipation of warm, loving times spent celebrating with your family, or that sinking feeling inside, reminding you of all the work, money and stress that go along with the Christmas season?  If you’re in the former group, congratulations!  You’ve got things well in hand.  I usually find myself in the latter group, stressed by all the things that need to get done, too distracted to be joyful.  Some years the season gets by me and I realize that I haven’t really “felt” it at all.  But in reflecting back on our most meaningful Christmas seasons, I’ve found that they had much less to do with how much money we spent than how we spent our time.  Here are five ways to keep that in balance.

Know how much you can safely spend; plan for it and stick to it.  Christmas isn’t a financial emergency.  Unlike a car repair or hospital bill that comes out of nowhere, Christmas comes at the same time every year.  Plan for it, and save ahead of time.  It’s important to know going into the season how much you want to spend, based on what’s affordable for your family.

Nothing adds to the post-Christmas blues more than getting an ugly credit card bill in January and wondering how it happened.

Pay with cash or a debit card whenever possible, and if you have to use a credit card, keep close track of what you’re charging and make sure you’ll be able to pay it off in full when the bill comes.  Make a list of all your anticipated Christmas expenses.  Besides the gift list, remember the cost of gift wrap, décor, entertaining, charity, and take-out on those busy nights.  Add up your list and estimate what it will all cost, keeping in mind the budget you determined ahead of time, trimming where necessary.

Keep expenses in line with your budget.  Be tough on this one, and don’t give in to the pressure to overspend.  Feeling good by giving gifts beyond your means won’t mean much when you’re faced with bills you can’t afford.  Look at your expenses and prioritize the list.  Decide in advance how much to spend on each person, and track it along the way, staying aware of how much you’re spending.  Denial is a budget killer!  Avoid the holiday “arms race;” just because you overspend on one person doesn’t mean you have to raise everyone else to match.  Shop with a plan, so you’re not tempted by last minute, easy, but more pricey solutions. Consider bringing envelopes with the allocated amount of cash for each person or purpose when you shop.  If you need to trim your list, talk honestly early on with others; you may find they’re relieved to change the routine too.

Home-made or home-baked gifts help stretch the budget and have a nice personal touch.  Be creative—we had a blast one year writing and performing a song for my dad to the tune of “The Twelve Days of Christmas,” complete with costumes and props.  Combining gifts for a family can work too; instead of giving individual gifts to a niece, nephew and parents, give one gift the whole family can enjoy.

Gifts of memberships are especially fun, because you’re giving quality time.  The Philadelphia Zoo has a great membership program that’s reasonably priced, is reciprocal with over 100 other zoos and aquariums around the country, and can even be tax deductible.  Visit www.changingthepresent.org for some charitable ideas you can give as gifts, or pick up a “Kiva card,” a gift card that allows the recipient to loan out the funds to someone like Angjeline in Kenya, who needs chicks and chicken feed to expand her poultry business.  Don’t forget to keep our friends in business by shopping local for the win-win of getting unique and beautiful gifts and recirculating dollars in our own community.

Spend more time than money.  When you’re caught up in the hustle and bustle and start to forget the reason for doing it all, there are lots of things to do that will help bring meaning back to the holiday.  Live in the Northeast PA area?  Visit the “Old Time Christmas” at Quiet Valley Farm, or Christkindlmarkt in Bethlehem (www.christmascity.org).  If you’re down that way, the city of Allentown has a large, drive-through light display called “Lights in the Parkway.”  Find a live nativity like the one at the Reformed Church of Bushkill; little kids in angel costumes have a way of bringing the meaning home.  Bushkill Community Church’s “Night of Giving” dinner theater each year benefits the Bushkill Outreach.  And nothing puts you in a holiday mood like “Tiny Tim’s Christmas Carol” or a Messiah Sing In; the Shawnee Playhouse has both.

Tradition, Tradition!  Kids love the security of traditions, even as teenagers and young adults.  What traditions did your family have that you’d like to continue with your own family?  What new ones can you adopt?  Each week during Advent we have a candle lighting and devotion, complete with a special snack served on china.  We light the last candle Christmas morning and eat Happy Birthday ice cream cake on a tablecloth the kids made years ago with their cousins. Some traditions have to change as they get older- when you spend almost the entire budget on a gift the size of a postcard, Santa looks pretty cheap when it’s left under the tree.  Now instead we have a treasure hunt with hints leading to several small gifts along the way and ending with their “big” gifts.  And other traditions continue no matter how old they get- I’m sure my kids will still be looking for that new pair of PJ’s on Christmas Eve when they’re 35.

Christmas can be hectic, but if you plan ahead to be intentional about spending your time and money it can be much more meaningful and enjoyable.  You can be fairly certain your children aren’t going to remember each and every gift you gave them for Christmas, but they will remember how you spent it together.

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  1. Two Dollars and a Dream | Purposeful Money with Erin Baehr, CFP® - November 30, 2012

    […] jackpots that don’t require winning the Powerball to enjoy.  Some are listed in the post “Taming the Holiday Spending Monster.” The dates for some of those events are listed below.  Please feel free to add in the comments […]

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