Plan Now to Give Your Kids the Best Holidays Ever Without Going into Holiday Debt
It happens to many of us every year. We don't start thinking about holiday gifts until the holidays are almost upon us. This leads to enormous expenses all at once, lack of time to wait for a sale, and limited ability to shop around. Worst of all, waiting until the last minute for holiday gifts may mean that you can't find that highly sought-after toy that your child really wants. Holiday debt can be hard to avoid.
Matt Reiner, co-founder of Wela, has some tips families can use now to help budget for the best holiday gifts this season and avoid going into holiday debt.
- Start buying before Black Friday. It’s easier said than done, but don’t wait until the last minute to do your holiday shopping. Start getting those gifts while they aren’t heavily sought after. Also, by spreading out your purchases, you can utilize cash flow over multiple months, as opposed to building up credit card debt during the holiday season months.
- Plan and budget in advance, as holiday spending is always more than just gifts. We need to plan for the holidays well in advance because the costs associated with the holidays go beyond the cost of buying gifts for your kids. Travel, food, parties, and other engagements tend to push the expenses for the holidays even higher. Once it comes time to start purchasing gifts, the money goes on the credit card, and the other expenses of holiday season start piling on. Before you know it, you are wondering why you don’t have enough cash to pay off your current credit card bill.
- Treat planning for the holidays like building your emergency fund. Planning for the holidays is just like planning for an emergency reserve. You need to build it up for when expenses happen that are unforeseen. The holiday season tends to have a lot of those types of expenses.
- Avoid credit card savings traps. Don’t fall into the trap of saving a little on your purchases by opening up a new credit card. Instead, look to use the points you already built upon your current credit card to use toward holiday gifts or to get some money back that can be put toward holiday shopping. Having too many credit cards, and signing up for them during the holiday season, leads to forgetting about them and allowing interest to accrue. And accrued interest is the type of gift you do NOT want during the holiday season.
It's also good to plan strategically. If you see something that would make a great gift on sale, buy it and hide it! Also, try to order gifts in advance to avoid paying rush shipping charges. If you avoid holiday debt and plan in advance for the holiday season, you can relax and enjoy the holidays a little more this year!