This year more than ever, you will want to keep tight control on your holiday spending. With the economy in the tank and unemployment rising, your best defense is well, a good defense. Follow these four steps to stay on budget and out of debt:
Step 1. Determine the total amount of money you can afford to spend on all gifts without borrowing any money including credit card debt.
Step 2. Make a list of everyone to whom you plan to give a gift.
Step 3. Assign dollar amounts as “targets” for how much you will spend on each person on your list. Be sure that your individual totals do not exceed your overall budget.
Step 4. Keep a running total of all of your spending whether you use your checkbook, cash or credit cards.
Your goal is to get through this season with cash left over and no new debt. Here are some ideas that show people you care but that won’t cost you a bundle:
- Give ‘baked’ goods. Everybody loves food and nothing says you care more than something you personally baked.
- Make a donation to a charity. Many charities offer multiple gift cards that acknowledge to the recipients that you have made a donation in their names. With this strategy, you get to give a donation to your favorite charity; receive a tax deduction; and acknowledge people you care about in a very special way.
- Pass along a cherished possession. There’s no rule that gifts have to be new. If you know someone has always admired something you own—a piece of jewelry you inherited or a framed print—why not pass along that item to that person. Wrap the item in fancy paper with a bow and include a note saying that you hope the item brings them the same pleasure that it brought you.
- Give a ‘Time Certificate’. Create by hand or computer a mock gift certificate. It can include babysitting, yard work…use your imagination. This offer can be modest or extravagant—but the recipient will certainly know that you’re giving of yourself with this gift!
- Create a Holiday CD. Record some of your favorite holiday songs and make a CD using a CD “burner”. They’ll love the music and think of you every time it’s played.
- Start a Photo Album. In most families, there’s one person who loves taking and keeping photographs. If you’re that person, go through your albums, especially your old ones, and create some smaller albums for your relatives. Or reproduce one old picture, perhaps with relatives who have passed away, and frame it as a gift.
- Write a note. People often do not take the time to tell others how much they mean to them. Write a note to the special people in your life. You will likely find that it is the one gift they will cherish forever.
Get your family members in on the act and see what other ideas you can come up with. Email me (email@example.com) your best ideas and I’ll give away an autographed copy of my book, “The Complete Idiot’s Guide to Getting Rich” for the top 5 ideas. I’ll even get you the book in time for you to give it to someone on your Christmas list!