I love the holidays. I love buying presents for people and I love the hustle and the bustle of the malls. I like seeing the little kids squeal with delight as they are in line to sit on Santa’s lap. I like the feeling I get from giving something I know the other person will really enjoy getting. I also love a good deal and a great bargain. I am guessing that makes me a lot like you when it comes to Christmas shopping. I am guessing these things also makes me a lot like you: the fear that comes from getting a present from someone when you didn’t get them one. Or the idea that someone might spend more on you than you did on them and the embarrassment you feel if it happens. Add all of that together and you end up with recipe for holiday financial disaster. Top that recipe off with the fact that most folks just don’t have the money they did in the past and you put a nice little coat of guilt and shame, embarrassment and humiliation on top of that recipe that can ruin the joy of the holiday.
Sound familiar? Of course it does. I deal with it just like you and just like everyone you know. So what do you do about it? Follow these steps and you will have a much better holiday and still be financially sound when the holiday is long over.
1. Reality check. The ugly truth many face as they open up their Mastercard and Visa bills this month is that they are still paying for last year’s Christmas presents. Resolve NOT to go into debt this year. Just make up your mind and don’t do it. “But Larry, if I don’t go into debt than I won’t be able to buy anything!” Welcome to your new reality. If you can’t afford to buy it, you don’t get to buy it. It’s that simple. You should have budgeted for your holiday shopping and if you didn’t, you don’t get to spend any money.
2. Communicate. Talk to your family and tell them where you are financially. Tell them the truth about your money situation and tell them that this year it’s going to be different. Explain that you are not going into debt just to buy things they don’t need just to justify you feeling good about the holiday. Try some good old fashioned honesty! If your kids are small, you don’t have to have a conversation, you have to get creative. The best Christmas my boys can remember when they were young was when I was flat broke and spent $50 at the Army Surplus store. Open communications is the key to a happy family and you need to get the truth out there in advance so you can create realistic expectations.
3. Shop with a list. Get out a sheet of paper and pen and write down in black and white what you are going to buy and what it will cost and determine whether you have the money to buy it. Stick to the list. Don’t just go “Christmas shopping.” People who go shopping buy crap they don’t need and spend more than they have budgeted.
4. No electronics. Yep, that’s right. None. Electronics are ruining our children. Don’t believe me? Read my book, Your Kids Are Your Own Fault: A Guide For Raising Responsible, Productive Adults to get the facts on this one. Buy balls: soccer, basketball, baseball, football and bouncy balls. Buy bicycles, board games, puzzles, skate boards, yo-yos. “But my kids want electronic games!” You are the parent so act like it. Buy them things that require them to move and think and play outside and that require you to play with them. You know, like a real parent who is actually involved with their children! Besides, electronics cost too much and make your kids fat, lazy and stupid.
5. Beware of bargains. Make sure that they didn’t mark it up just to mark it down. Do your homework. Don’t trust the retailer to tell you the truth – research!
6. No store credit cards! The claim is that you can save 10% on your purchases by opening up a store credit card today. Don’t do it, it’s a sucker move. “But Larry, I am saving 10%, isn’t that smart?” No, it’s stupid. You have too many credit cards as it is and is a ploy by the retailer to get you to spend more on the initial purchase and in the future.
7. Savings and sales. Get a grip on this one: If it’s on sale for 40% off, you are still spending 60%. You aren’t saving money, you are spending money. Even if it isn’t as much as you would have been spending, you are still spending, not saving. Thinking that spending is saving is stupid.
8. Your love for someone is not based on how much you spend on them. Tell them you love them. Communicate your love all year long so there is nothing to prove during the holidays. Presents do not equal love. Loving them equals love. Love your family enough to be fiscally responsible.
9. Make your presents. Either get to baking or get crafty. Cookies, cakes, candy and anything else you hand make are great, thoughtful presents. “But I can’t cook.” Bull. Get a recipe and follow it. Same with being crafty. Even if it sucks, it shows the recipient you took the time to make it. And on this one: be early. Get out in front on the curve and give your handmade gifts early in order to set the pace on the gift exchange process. Trust me, they will appreciate the time you took to make something and will appreciate an “out” of their own so they don’t have to spend a lot of money on you.
10. Plan better next time. It’s never too early to start planning for next year. Start a little Christmas present savings account and don’t touch it until next year so you won’t be caught broke and scrambling and with a mailbox full of regret.
Have a great holiday. Fill it with more love than presents. And remember that the best gift you can give your family is financial security.
I love this, Larry! It made me laugh out loud.
Here’s my question for you. How do you handle tipping for the holidays? I’d always figured that I don’t buy my siblings presents (we do things together instead), I wouldn’t give the mail carrier a gift in April and and I get my kids very simple and inexpensive gifts so why would I give a gift to the garbage man? Yet everything I read this week is about proper tipping and a long, long list of people I’m supposed to tip. Am I really supposed to be tipping everyone? If we’ve chosen to cut back and not blow our money in December am I a Scrooge if I don’t tip everyone who provides me a service throughout the year?
Tell it to me straight, Larry!
Nicole – I don’t tip money at the holidays. In my case, I can give people a book and say thanks. But for some folks, my wife and I give them cookies or pumpkin bread that we make and put in a gift bag. It’s more thoughtful than money and much less expensive.
Good blog post Larry, thank you.
Larry!
I am a big fan of yours and was given your book by my dad (Brian Petersen- A HUGE fan of yours) years ago. I am trying to dig my family out of the debt i’m in at a young age (28) and your advice and humor inspires me to think of more ways to save money and get back to where we need to be. I love these Christmas tips- especially the part about no electronics!! Kids need to get out and PLAY! Thanks so much for sharing your knowledge with us all!
Tyler
This is such a great posting. I’m sending it to my friends and family. As I was reading it, it occured to me that I’ll bet my friends don’t really need or love the gifts I buy for them and don’t really love having to shop for me, either. We can all celebrate the season by giving some homemade food or beverage items and call it a day.
This should be an annual classic column. You are so right about not incurring new, unbudgeted, debt for the holidays.
As usual you’re spot on! We have boys who have never had video games…but now the Evil Apple Empire has struck and guess what’s on their lists? Yep! I Pod Touches and I Pads. We’ll spring for a FAMILY IPad, but they’ll have to spend their own money on the Touches. Sometimes they have to learn lessons the hard way, right?
Excellent, timely advice! The retailers are really going to hit hard this year because they’re afraid that folks won’t spend as much (whether by choice or force). You’ve got to be smart and vigilant about what you’re spending on as well as how much you’re spending. I decided long before the financial meltdown that gift giving was O.U.T. I cook dinner and desserts with my mother’s family and that is our way of sharing. For my dad’s family, since we do family reunions every other year, I just combine all the photos that I took at the reunion, burn them to a CD and mail that out with a Christmas card. Inexpensive (except for postage, LOL!) yet thoughtful. I purchase cutesy Christmas cards that are blank inside at the dollar store, that way I can add my own heartfelt thank-yous and love-yous. You are so very right, Larry – Christmas can be very much enjoyed without putting yourself in a major financial bind (which will take until next Christmas to pay off – yikes!).
This is the great holiday’s advice ever!!! Thank you Larry!
Great post
Larry, and a timely message for us all. We’re also discussing with our families, and extended friends, the idea that we do not need to be sucked in by the commercialism of the season. It’s better to take some time, time that you know is precious to you, and give it freely to a friend or family member for Christmas.
Great article! I like your approach to the holidays. When it comes to spending for the holidays or any other time, a plan is key. The usual plan is a budget, but a creative approach is equally important. I recently wrote a couple articles regarding Holiday Budgeting, one for Halloween and the other for Christmas on my blog (www.krantcents.com).
Great article! Wish I could afford to mail a copy to everyone I know.
Thank you Larry, I appreciate every word of this article.
I would like to translate this into French, send it to my friends and put it on my blog and any others I think might n be interested, is this OK by You?
Madeleine
Madeleine – that is fine with me, just put a link to my website and give credit to me when you post it.
Thank you I will do that and happy New Year.