Mary Hunt, founder and publisher of Debt-Proof Living, has a new book out. Debt-Proof Your Christmas, filled with holiday tips on how to budget money for gifts, decorations and more. For us, she revelas some of her top advice.
3 Bad Assumptions That Put You in the Hole
Bad Assumption: I Will Give the Perfect Gift. We make assumptions because they make us feel good. But they aren't necessarily true. For instance, we go to great lengths to find the perfect gift. That usually means we pay too much. And we give gifts to too many people. We have the unrealistic expectation that people will say "I'll wear it every day, and I'll remember you every day." You have to realize that no one remembers what you gave them after January 1. It's not that they're ungrateful or they're bad people. It's just what happens.
What this proves is it that the gift is only a messenger: it carries your goodwill and love. You'll automatically scale down your giving once you realize this.
Bad Assumption: People Love Gift Cards. In fact, people often don't spend their gift cards. Instead, they end up in the bottom of the drawer or the back of wallet. Maybe it's not a store they like. It's impossible to spend the money exactly; either you leave money on the card or you spend more.
Say you and a friend give each other $50 gift cards: what does that accomplish? If you're determined to go this route, Hunt advises giving cash. "Money is freeing; the recipient can buy something on sale, and at the store of their choice. Have you ever received cash and thought about the giver: she's so coldhearted, she doesn't care. I didn't think so!"
Bad Assumption: I'll Use a Credit Card and Pay It Off in January. When you're short on cash, you tell yourself you'll put gifts on a credit card then pay it off with your first paycheck in January. "But if you don't have the money to pay today, why will you have it next month? Where is this blast of extra money going to come from? It's so easy to let balance roll and roll until next Christmas."
4 Cheap Ways To Make Christmas Great
Skip Credit Cards. Put your credit cards in an envelope and seal it shut. Get rid of them. Now you don't have what you think of as a safety net but really isn't. You have to say, I only have $300 cash until January 1. What am I going to spend on Christmas? This is a great first step in how to do budgeting for the holidays.
Ditch Pricey Gifts. What do people love most? A sweet treat they wouldn't eat the rest of the year. You don't have to be a candle maker or a crochet artist to create a homemade gift. Buy a bag of nuts and a bag of chocolates, combine them in a nice jar with a nice card. People will love this gift.
Give the Gift of Your Time. If you want to do more, offer a service. Make a coupon good for 8 hours of housecleaning, 3 computer lessons, or to drive someone to the airport. Just be sure to schedule it. Don't put the onus on the person, who might be embarrassed to call you and set up the time for the service.
Decorate on the Cheap. "Decoration is a killer. People don't think of it as part of the budget, but it is." You've got to set a limit — say, I'm not going to do more than $50 this year. Thrift stores have great decorations before the holidays. Check out the great buys you'll find there. Cut something green and bring it in the house. You can do beautiful mantlepieces with evergreen boughs and apples. All you need is red and green.
Children expect decorations, so bring them into the act: Decorate the door to their room: Wrap it up like a gift.
Play the Pantry Game. No money for the holidays? You can raise cash quickly. Play the pantry game with your kids by pledging not to enter a grocery store for two weeks. Eat what's in the cupboards, the refrigerator, the freezer, then use the grocery money for Christmas. You can usually amass a couple hundred dollars this way.
When you do hit the supermarket again, stock up on baking ingredients – sugar, flour, chocolate chips – that are on sale now. Load up for the rest of the year. You can freeze nuts. Turkeys are a good buy this time of year too.
For more holiday tips on how to budget money for your best Christmas ever, check out Hunt's book Debt-Proof Your Christmas.