By Allison St. Claire
With the holidays just around the corner, many of us may be tempted to begin a month-long gift-buying binge. Here are 15 steps to avoid having to use next year's tax refund to dig yourself out of holiday debt.
1. Find a plastic freezer bag. In fact, think thrifty - recycle a used freezer bag. Drop in all credit cards. Fill with water. Bury in the back of your freezer until after the holidays.
2. Call, write, email or get together with each person on your gift list over the age of 21, and specifically to talk about gifts. Do they mostly agree with you that holiday presents are for kids? If so, would they like to join you in working toward a financially responsible, simpler lifestyle by forgoing an adult gift exchange?
3. If so, suggest that each of you set aside half the money you would normally have spent on each other to buy a gift for a needy child and/or make a donation to a charity you both like. It's guaranteed to give you a good feeling, and you'll avoid having to conjure up a false enthusiasm for the extraordinarily useless thing that person would have chosen for you.
4. Take a reality check. The family down the street can afford to go to Vail to ski over the holidays. You can't. Have a family meeting or round robin email or letter. Ask each person what would be the ideal gift they would like to receive from you. The most frequent answers usually cost almost nothing - a new photo of you, some time together, a guaranteed phone call or letter every other week - and mean so much more to the recipient than the knick-knack you buy.
5. Take reality check #2. OK, the children thought a little differently. They want the most expensive GameBoy or motorized scooter or this year's fully outfitted Barbie. Show them the price of that gift, explain how much you could contribute to acquiring that and let them help think of solutions to collect the rest of the money. Maybe one less video rental a week? One less fast food dinner a week? Of course, be sure to set aside one affordable gift for Santa to bring, but some of the greatest lifetime gifts you'll be giving your children are 1) a sense of reality about money; 2) the understanding that their opinion counts; 3) the knowledge that they are part of a family team that needs to operate together for the good of all, not just the gratification of one; and 4) a strong grasp of the lesson that to choose wisely leads to control of their own life.
6. Create your own Holiday Club fund. Such accounts used to be a big deal years ago at most banks. Unfortunately the clubs paid little or no interest - they just acted as a nagging reminder to start putting away money all year toward holiday gift giving. You can do the same thing on your own, but shop around and find out how to get the best interest accruing while the fund grows. Rigorously contribute to the account with a set amount out of every paycheck.
7. Create a little extra cash over the year by regularly putting the price of one day's lunch or one week's desserts or one less pair of shoes into that holiday money fund you're building. If giving a gift to someone is truly meaningful to you, the sense of not indulging yourself in order to give to him or her will become a heartwarming, fulfilling choice.
8. Design the budget of your dreams for holiday spending. Now cut that in half, at least. Does your next door neighbor really need one more knickknack for her already overcrowded home? Instead of a gift, maybe your co-worker would prefer that you cover her job or work overtime the next time she wants to leave early for her child's school play.
9. Now, stick to your budget. Rigorously. Remember your credit cards are buried in layers of ice. If you can't afford the gift you're coveting with the cash in your wallet or checking account - without sacrificing normal daily needs - the gift gets to stay on the shelf for someone else to ponder. Remember that money does not equal love.
10. Have little ones around? Be the first on your block or in your school or church to organize a trade-a-toy event for adults only. A toddler will never know the shiny toy you cleaned and polished once belonged to the little boy down the street who's tired of it. Ditto for those clothes quickly outgrown, or the computer game software not played in the last year.
11. Shop wisely to make sure the deal you're getting is the very best available, whether by catalog, online or in a retail outlet. Especially make use of no-charge online comparison pricing services that will indicate the cost of a certain Barbie doll, for example, at a number of different sources. Always be on the lookout for bargains; in today's prosperous economy, some really elegant clothes and toys are donated to thrift shops and can be had for a quarter or less of what they cost brand new.
12. Shop late. Until my son was in grade school, we simply celebrated Christmas gift giving time a few days after Christmas. I bought almost all his gifts at rock bottom post-holiday sales. Over the years he realized he got a lot more of what he wanted this way instead of celebrating the same day as his friends did - and we continue the tradition. Does your family absolutely require getting together on Christmas Day? You could save a bundle on gifts and airline tickets, for example, if you traveled and celebrated off-peak.
13. Does your glitzy holiday card really brighten up someone's life? If you want to send something bright and cheery, cut the front off a card you received last year, and tuck it into an envelope with a note that lists ten things you like about that person. www.10greatestgifts.com offers an inexpensive pad of 25 "Live Well-Laugh Often" sheets, with blanks to write out the qualities you value in the other person. Even cheaper? Design one yourself. The enjoyment of a lovely but mass-manufactured card is limited. The heartglow from a list like this is boundless.
14. Subscribe to any one of many excellent "thrifty" newsletters and put a portion of your additional savings over the next year into your holiday club account. Some possibilities: Dollar Stretcher, PO Box 23785, Ft Lauderdale, FL 33307; www.stretcher.com. Frugal Living, PO Box 58, Portage, MI 49081; www.livingfrugal.com.
15. Keep your credit cards in the freezer until the next genuine emergency. Playing financial catch up is always expensive. Credit card companies have craftily designed their fees, extra charges, interest rates, etc. to keep you in financial bondage forever. Break free. Be conscious. Be conscientious. Always save ahead instead of paying behind.