Planning spending ahead of time to make your gift-giving season merrier

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Published Date 11/15/2019

As the Christmas holiday approaches, the time to think about holiday debt is now, before Thanksgiving dinner has been laid before you. Avoiding going into debt over the merriest season of the year takes thought and planning.

MoneyQanda’s Hank Coleman offers some suggestions for you to kick around before Black Friday arrives. The first is to be honest about it. If you have kids, don’t make promises you either can’t keep or honestly can’t afford. Like adults, kids appreciate transparency about how much Santa can do from year to year. It also teaches them about how they might parent someday — being loving yet practical.

One of the best times of the year to use credit card reward points is now. “We use the points at the end of each year as a way to get free gift cards that we ultimately give to our friends and family members each Christmas,” says Coleman. “Those reward points help supplement our gift-giving and helps to keep us from going into debt. You can find great deals on reward points when you compare credit cards and pick the right one that will earn you the most points on the things that you buy most.” Coleman goes on to say that the one thing he loves at this time of year are the deals that retailers and especially restaurants give when you purchase gift cards to give as gifts. “Many national restaurant chains offer deals such as giving away a free $10 gift card when you purchase $25 worth of gift cards,” he says. “The card can be great ways to get gift cards to give to your loved ones during the holidays doing something that you normally do anyway (go out to eat).” He cites Giftcardmall.com as your go-to place for hundreds of the best retail branded gift cards like Nordstrom, Home Depot, iTunes, Starbucks, AMC, and much more. Want your gift cards to reflect your love? You can get them customized gift cards by uploading photos and images.

You can also turn into that savvy shopper you always wanted to be. Be that person who never pays retail prices online for anything. With the internet at your fingertips, you can look for deals and check comparison sites before making a purchase. Again — what you can be doing NOW, before the shopping season hits in earnest. Web sites like RetailMeNot.com help you find some of the best online coupons before buying any items online.

Another thing you can do is to be open about gift-giving. If you are prone to leaving no one out each season, think about how your aunts and cousins would understand if you told them that you are only giving gifts to your immediate family this year to save money and avoid adding to your debt this Christmas season. Perhaps when you see them, you can offer some baked goods instead of wrapped presents. You can declare that you are on a holiday spending diet this year and have a budget you have promised yourself you would stick to. Family understands.

Speaking of spending plans, it’s already time to start thinking about next year. A few decades ago, banks offered Christmas Club savings accounts so that their patrons could automatically contribute a small amount to the following holiday’s gift-giving efforts. If you spend the average $500 during the holidays on gifts, saving $40 per month or $20 per paycheck, you could have a debt-free Christmas next year.

Remember the layaway department in retail stores? It was a way to procure the item you wish to buy, have it set aside by the establishment as you made payments on it. Many retails are hitting the mark this holiday season by bringing back layaway. “Using layaway is a great way to force you to space out the payments for your gifts this holiday season,” says Coleman. “Instead of going further into debt this Christmas, using layaway can help you purchase your gifts with payments that you can afford.”

Coleman also urges caution with layaway plans. Some programs can find you spending more on an item than it would be at holiday time. It can also lead to overspending. “It is easy to buy more than you intended when you do not have to pay for those purchases right then. Layaways have a way of not keeping us honest with ourselves. It is all too often easier for undisciplined consumers to spend more than they can afford when they use a layaway program from a store,” says Coleman. Of course, no plan is without (service) fees, either. Check to see what you are getting into if you do not complete your purchase by a certain date, or pay a fee on top of the retail price. Also, study what the cost might be if you decided to back out of the purchase or miss a payment.

And then there is that proverbial cookie jar. “It is the tried and true method of simply saving for your holiday spending ahead of time,” says Coleman. “You should start saving for next year’s Christmas presents in January. The earlier you start saving will help you avoid having to use programs such as layaway and credit cards that drain your bank account one fee at a time.

Coleman advises whether you get cash-back rewards on a credit card or you keep spare change from cash purchases in a jar, put these unexpected funds towards a holiday savings account. “There are a lot of unique ways to trick yourself into saving money. Using these interesting ways will help you incrementally grow your balance almost without noticing it.”

Source:MoneyQuanda, TBWS

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