We are so pleased to have a GUEST contributor today.
Author: Sandra Brown.
Sandra is a Seattle native and English teacher living in the heart of Dixie. She enjoys blogging, baking and antiquing.
Image via Great Day Moving
The average consumer expects to spend about $704 on Christmas gifts this year, according to a mid-November Gallup poll. This is down from the estimated $786 in an October poll and $770 at this time last year, suggesting Americans are feeling a growing budget crunch as the season progresses. It’s getting down to the wire, and if you’re worrying about how you’re going to afford gifts for all the people still left on your list, it might be time to consider adopting an easier, thriftier approach to Christmas.
Learn to Set Limits
It would be lovely if you could afford to buy for everybody who has touched your life in a significant way, but it isn’t always possible. Instead of buying costly gifts, start new no- or low-cost traditions with those in your gift-giving circle, such as going ice skating or holding a white elephant or secret Santa exchange. The others will probably appreciate this switch as well. Not only does it save everybody money, but it underscores the importance of spending time with loved ones vs. simply spending money on them.
Make a List and Check It Twice
Make a list of everyone you’re considering buying for, prioritize your spending and decide who’ll you’ll buy presents for, who you’ll make gifts for and who will get a card. Financial expert Dave Ramsey provides a Christmas budget tool to help you keep track of your gift spending. Don’t forget to factor in other holiday expenses, such as the cost of hosting parties, traveling to visit relatives and sending cards.
Of course, there are going to be some people for whom you still want to buy presents. LearnVest financial expert Allison Kade advocates the 50/20/30 rule: 50 percent of your income goes toward necessities such as rent and food, 20 percent furthers financial goals such as building retirement savings and 30 percent covers lifestyle purchases such as entertainment. Holiday shopping falls into this last category. Keep your holiday spending within the limits of the portion of your budget you have allocated to lifestyle purchases. Do not dip into emergency savings or run up credit card debt in order to buy gifts. It’s wiser to fund your gift purchases by drawing from funds you have allocated to your lifestyle budget category throughout the year.
Of course you’ll have more available to spend if you handle the rest of your budget prudently. Build your savings and keep your debt low. If your situation entitles it, you might take the suggestion of those J.G. Wentworth YouTube videos under advisement and consider whether having a financial service provider buy your structured settlement or annuity could help relieve strain on your budget.
Start Planning for Next Year Now
After this Christmas is over is the perfect time to start budgeting for next year. This can be as simple as doing some basic math; it you’d like to spend, say, $750 on Christmas, divide that by 12 months. That’s $62.50 a month you need to put away for Christmas 2014. Save up throughout the year so you don’t end up in the same boat next Christmas.