Deck the Halls Without Much Money

Even in tough times, consumers are expected to spend a total of over $437 billion during the 2009 holiday season, according to the National Retail Federation (NRF), Washington, D.C.

Some people may feel guilty about not spending as much time with their loved ones or friends and will compensate with a special gift. Others may feel they need to ‘keep up with the Joneses' to match what friends, families, neighbors, and even co-workers are doing. And some simply get swept away in the glitter of the season--overspending before they realize what they're doing. For all of these reasons, setting a budget and making a list--and matching the two--can be really effective at reining in the ‘over' part of holiday overspending.

Smart spending

Changing the gift-giving dynamic within your own family is one route to holiday savings, but what about the other people on your list? Brad Stroh, founder and co-CEO of Freedom Financial Network, LLC, San Mateo, Calif., and bills.com recommends:

  • Crunch the numbers. Create a holiday budget listing all expenses, including small gifts and "extras," such as cards, wrapping paper, decorations, and holiday clothing purchases.
  • Avoid money matching. Most people feel the stress of the dollar-for-dollar matching competition, so talk with the people on your shopping list about setting limits. Fill in gaps with homemade presents or offer help to the recipient with chores or services.
  • Start early. Avoid the last-minute rush so that you'll have more time to comparison shop. If you're in a rush to get out of a crowded mall or store, you're more likely to spend impulsively as a way of escape.
  • Get creative. Set up a gift exchange among friends and family. For children with big-ticket items, consider pooling resources with other family members rather than splurging yourself into debt.
  • Be a quitter. When you hit your budget limit, stop! Leave credit cards at home and put each person's budget in an envelope, in cash. When it's gone, it's gone--and you're done.
  • Spend within your means. If you run up a big bill to celebrate the holidays and then pay it off at a leisurely pace, next year you may experience financial heartburn--the sour sensation that your holiday overindulgence is taking way too long to leave your budgetary system.

Holiday traditions beyond gifts

The special feeling about the holidays doesn't always come wrapped in a box and tied with a bow. New York executive coach Alisa Cohn works to help clients live, work, and spend/save in alignment with their values. Here are a couple of ideas:

  • Mark the holiday through traditions rather than gifts. Pool efforts with other family members or friends to help out another family in need. Contact churches and other organizations in your community and ask for recommendations. You can unite anonymously to buy food, gifts, and holiday goodies for the family in need.
  • Make the holidays special. Talk with your friends and family about what they like and dislike about the holidays. From those discussions, build a plan that decreases the attention on gift giving.

And to avoid going in the red next year, contact Harvard University Credit Union for help in setting up a budget for holiday shopping. Check out the HUECU Holiday Loan if you're in need of some assistance this holiday season and don't forget about the HUECU Holiday Club Account to help manage your seasonal expenses. For more information, you can stop by any of our branch locations, call us at (617) 495-4460 or email us for more information.

 

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