Lesson on Holiday Debt Management

The spending is fun and well intended. The debt can be dreadful. With the holidays upon us, it's the perfect time to consider fiscal fitness.

We need to learn from past experiences and have to ask ourselves What factors caused me to overspend?
Maybe you were involved in too many projects; maybe you ended up going out to dinner, andthat made you overspend.
Getting started late and having projects fail. Getting too tired to finish things. Getting sick or family members getting sick and not finishing things.

Set Spending Limits
Make a budget and then stick to it. If you can only afford to spend $100 in gifts this year, then find a way to make that money count. "Develop a spending limit for each person on the list," says Steve Blankenship, a Certified Financial Planner™ professional and principal of Heritage Financial Planning. "Stick to your limit! No matter how much your grandson would love the latest and greatest Xbox game, keep in mind that you will have to climb as high financially as the hole you dig for yourself."

What is the point of gift-giving? Is it to reciprocate the dollar amount of a gift that was given to us, or one that we think might be given to us in the future? No! The point is to acknowledge that other person's positive influence on your life. "Thank you" and "I love you" are phrases that don't come with dollar amounts attached to them, so don't allow yourself to be caught up in spending more on holiday gifts than you can afford.

I would like to think that people who care about me wouldn't want me to buy them something I really can't afford.

I've come to realize that I'd much rather get a gift I can USE! So I've adopted that philosophy also.

I like to bottle food. Everyone I know eats. It works for me.

Make a Family Rule – Many of us talk ourselves into spending extra cash when we locate the perfect gift. So to avoid overindulging, agree to spending limits with your family and friends. For example, no gifts over $10, $20 or $50. When families stick to the rule, everyone saves and no one feels bad or embarrassed that they didn’t spend more.

Homemade Décor Feels Like Home – There’s no need to go overboard on decorations. Making your own can be both economical and environmentally friendly. A little paint, glitter and a few pine cones are a fast and festive way to spruce up your holiday décor. And don’t forget about last year’s decorations. If they’re in good shape, don’t purchase new versions just because it’s a new season.

Stick to Cash
"If you really want to take control of your spending this year, forget credit cards altogether," says Blankenship. "Studies have shown that consumers spend significantly more when they use credit cards than if they had used cash. That is because cash if finite; it is easier to see your wallet’s cash supply is dwindling than it is to see credit card bills mounting."

Make a List
Know what and who you're buying for before you hit the stores. While it's not ideal to be preset on something (you may stumble on a great deal for something unrelated), do have an idea in mind. Does your sister love writing? Plan on a diary or a fine pen. Has your best friend taken up painting? Get her a new set of brushes or an easel. A well-thought gift will be much more appreciated than an expensive trinket they can't use. Keep track of what gifts have been already purchased to avoid duplicates.

Develop Your Own Gift Guidelines
There are lots of ways to temper the "gimmes" our kids can be so prone to during the holidays. Consider setting a specific dollar amount for each child, and sticking to it. Or decide that you'll limit the number of gifts to three items per child. Remember, there are always going to be people who will spend more on their kids, but attempting to "keep up with the Jones'" comes with a heavy price. Teach your children early that thoughtful gifts don't have to cost a lot of money, and what's most important is appreciating all that we've been given already.
What are some of the ways you have found to temper the gimmies with your kids?

Tally the Extras
It's not only the big gifts that put a dent on your budget. You also need to account for all the little things. "Make like Santa and list all your holiday expenses," recommends Freedom Financial Network, LLC, a credit counseling and debt-consolidation service. "Include small gifts to teachers, babysitters, newspaper carriers, etc., which can add up quickly. Don’t forget extras you may have, such as cards, food and beverages for entertaining, and holiday clothing purchases." Small $20 gifts can add up into the hundreds if you're not careful. You may have to consider dropping people from your list if you truly can't afford to buy something for everybody. Another option is to shop at discount stores for little knick-knacks that will count as a gesture rather than a gift (a scented candle, a box of chocolates, a wall calendar).

Get Crafty
While not everybody in your list will appreciate a batch of homemade cookies, some definitively will. You don't have to be especially talented to make homemade presents –Think a Death by Chocolate, a gift certificate for babysitting for a friend that desperately needs some me-time. If you do have a talent, put it to good use –Can you hand-craft soap? Do you know how to make your own potpourri? Do you have a secret recipe for chocolate chip cookies that everybody loves? Think outside of the box.

Don't shop for yourself.
Avoid the "one for you, one for me" shopping mindset. You'll end up spending double what you would had you shopped only for the loved ones in your life.
Ignore "big" sales. More often than not, they're not really sales at all. Those "Buy 2, Get 1 Half Off" deals only trick you into buying more than you would otherwise.

Remember, stick to your list.
Communicate with Younger Kids – The holidays are about much more than gifts. Remind younger children about the true meaning of the season and make it clear why expensive gifts aren’t needed, especially in the current economic climate. It’s also the perfect time to start new family traditions that don’t center on exchanging gifts.

Know when to Stop
According to Freedom Financial Network, LLC, it's important to know how to quit --"When you hit your budget limits, stop. If you need hard-core support to keep yourself in check, leave credit cards at home and put each person’s budget in an envelope, in cash. When it’s gone, it’s gone – and you’re done." Do your children really need 10 gifts each? Do you need six new glass ornaments? Establish your priorities well in advance.

Next question we should ask is; What holiday activities and events could have been scaled down without a negative effect?
Maybe the year before you had your whole family over for dinner, you prepared a very elaborate dinner, and it was expensive. Scale down; think of alternatives and allow yourself to be flexible.

Next year have a dinner at your house, because it’s something you enjoy, but maybe you can reconsider the meals and have smaller treats instead of a big dinner.
We should plan the holidays before they come up and include the whole family in planning. Talk about the expectations in your family.

What situations or events caused me to depend on my credit cards for holiday relief?
Things that make you use a credit card are the last minute things, things you haven’t planned on. Hence when you plan your holiday’s activities and expenditures you need to plan financially accordingly.

Holiday Parties on a Budget –
Being the host doesn’t mean the entire party should be on your dime. Throw a potluck and ask guests to bring their own beverages. These types of invitations are perfectly acceptable and can save a lot of cash. Or, just keep things small and intimate with your family and closest friends—your guests will appreciate just being together. Good conversation and laughter is free.

Be on the Lookout for Scams
Another way to hold on to your money this Holiday season is by protecting yourself from scammers that take advantage of unsuspecting consumers. “This is typically the time of the year when many new and returning consumers begin to shop online for the upcoming holidays,” says Andrew H. Te, CEO of PowWeb, Inc., a Los Angeles global hosting company serving small and medium businesses. “Common sense should prevail when it comes to scams that arrive in the inbox of your email system. Don’t open email that looks suspicious, just delete it. "What else can you do to protect yourself when shopping online?
Know who you're dealing with – Check out the company or buy only from well-established businesses, read their refund and return policy carefully, and only order on a secure server.

Keep a record of your transactions, including receipts and any pertinent printout.
Other scams to watch out for are those related to organizations asking for donations –If you're giving your hard-earned money away, make sure it's really going to a worthy cause. The Better Business Bureau (BBB) offers a series of tips on its website on how to avoid scams this holiday season, including the importance of asking for written information to review before making a donation.

Look For Free Gifts
If you truly have no money to spend, there are many things you can give that can't be bought at the local stores --Take somebody to a free church or university concert, offer to baby-sit for a busy mom or cook for an elderly family member, or make a memory book with an inexpensive photo album. Remember, thoughtful gifts are worth a fortune.

Take Advantage of After Christmas Sales
f there are some people who you don't plan on visiting until after the Holidays, wait to get them a gift –No reason to pass on the incredible sales that start on December 26th. While you're there, stock up on goodies you can use throughout the year, including wrapping paper, discount toys, and winter wear.

Push Your Focus Away From Spending
"While gifts are wonderful to give and receive, we have allowed them to become the focus instead of simply another part of the celebration," says Heidi Wanken, founder of Shopping Holiday, a group that encourages people to take a holiday from shopping. Recover the spirit of the season by focusing on helping others (volunteer at a shelter, a hospital, or a soup kitchen), valuing the little things (the batch of cookies your elderly aunt took an hour to bake), or starting a holiday tradition with your family.

Plan your holidays 12 months in advance. The day after the holiday is over there are lots of sales on holiday items. You can go next day after Christmas, Valentine’s Day, Halloween, and 4 of July and buy items 75% off. That’s a great time to get your holiday themed decorations,napkins, paper plates, cards etc. Planning well in advance will also allow you to save on gifts.

We can avoid debt by saving money for celebrations throughout the year.
Let’s say you figured out that for Christmas next year you’ll need to buy gifts, decorations, food etc. you’ll need $2000 to do so. Then you need to divide $2000 by 12 months, it equals $167.

Heavenly Father wants us to be happy. He wants us to be provident.
If we were buying Heavenly Father a gift, would we use a credit card?

Make it a great year, by not going into debt for this Christmas. He will be proud of you and everyone around you will be too.