5 Ways to Stay Out of Debt This Holiday

Family Matters on 11.03.11
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Photo: Kevin Dooley/Creative Commons

There's no reason that the Christmas spending frenzy should hit us like a Noreaster. We know it comes at the exact same time every year.

Instead of just braving the storm with a windbreaker and clenched fists, there are plenty of ways we can prepare to keep ourselves cozy and warm. (Because who wants to chill the holiday cheer with credit card debt?)

1.  Estimate and Divide

Apply the classic budgeting system to your holiday finances. Sit down and fill out a chart, like this holiday budgeting worksheet from Buttoned Up. Estimate how much you'll spend on everything from gifts and cards to decor and travel, then divide the total by the number of weeks until Christmas.

Voila'! Now you know how much you need to put every week in a cookie jar (or a targeted savings account).

2.  Get a New Game Plan

If you've done the above exercise, or you already know from last year's experience that you need to cut down, figure out ways to save in each category.

For example, could you put a limit on gift-giving this year? Our family has a new one-gift-per-person rule, but the presents still pile up. Some people decide to only give to the children, or to draw names and only give to that relative.

Have a family meeting and ask the kids to help you come up with creative solutions: Could you snap your own family photo, use plastic bags instead of fancy cookie tins, make ornaments instead of buying them?

3.  Hold -- Then Have

Layaway is a great way to avoid using your card while keeping your money safe from cookie jar thieves. A lot of stores -- both brick-and-mortar and online -- are offering this classic payment plan, where you put money down on something you want, and then make installment payments until it's paid off. Even though it's a little more hassle, it can be great for the peace of mind.

4.  Wrap Other People's Presents

Can't (or don't want to) cut anymore? The flip side of the budget coin is to generate more income. A lot of seasonal jobs open up at this time of year: gift-wrapping, package delivering, shelf stocking. An added plus? Workers usually qualify for a discount for a company discount. Check seasonal job openings at SnagAJob.

Sometimes the funds you're looking for are in that grill or gadget you've been meaning to sell. To see how much your spare goods are worth, check eBay's seller's guide.

5.  Think Homemade and Heartfelt

Does your child's teacher really need another knick-knack? Would the coach be just as happy with a handwritten letter saying how your child loved it when he [insert your favorite moment here]?

When a note is crafted specifically for that person ("You're the best" not allowed), it can be more treasured than a check. Pair a loving note -- as short as two-sentences -- with a plate of cookies, and you've got a first-class gift that makes everyone feel good -- and won't end up gathering dust at Goodwill in January.

Planning ahead takes a little more time and effort, but once you get over the hump, the payoffs are  huge. Do you have some strategies to add to the holiday budgeting list? Let us know in the comments!

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