According to the American Consumer Credit Council, the average American spends nearly $1,000 at Christmas. Even during tough economic times that total doesn’t waver much. For some reason, people feel the need to show their love for family and friends by spending money on them during the holidays.
Financial experts frown upon this practice and are encouraging cash strapped Americans to reduce their holiday spending by 30 to 50 percent this year. In addition, the money gurus are imploring people to set a budget for holiday gifts and entertainment and stick with it.
Have you created a holiday budget?
Some people don’t even have a household budget, so the idea of creating one exclusively for the holiday season may seem a bit far-fetched. However, it is a wise decision regardless of whether you are making like Oprah or Ebenezer Scrooge in the gift department this season.
For those on a shoestring budget, who absolutely can’t bear the idea of cutting out gifts cold turkey, go with quality over quantity. In other words, if your kid has a bazillion items on his Christmas wish list, buy the top item, and then use any leftover money on small, inexpensive gifts like art supplies. Another idea is to team up with another frugal family and host a toy swap. Simply wrap a couple of gently used toys your child is no longer interested in and exchange them with like-new toys the other family is willing to trade.
If your family is really having a tough time making ends meet, get rid of monetary gifts all together. Instead, give coupons for special favors. For example, you could give your kids an extra hour of TV or computer time, or an entire afternoon of one-on-one time with mom or dad to do lunch, sled or play basketball. Likewise, kids can reciprocate by giving parents coupons for a week of walking the dog, cleaning the garage or unloading the dishwasher minus the complaining.
How are you planning to reduce spending this holiday season?