Ah, the holidays. It's the time of the year when American homes are brimming with turkey dinners and pumpkin pie, eggnog and reindeer sweaters, merry carolers and mistletoe, and of course, excessive spending and impending debt.
Last year, U.S. consumers spent a total of $28.5 billion on Thanksgiving and another $460 billion on Christmas expenses, according to IBISWorld. Some studies show that the average American family spends $1,500 or more each holiday season. (No wonder green is the season's signature color!)
Plus, the majority of Americans are paying for yuletide fun and frills with plastic, not cash, and many of them end up spending dough they simply don't have. Last year, 31% of credit card users were still working to pay off their holiday debt in March or later, while 13% were still carrying Christmas debt a whopping six months after the stockings came down. 'Tis this season to be broke. (Find out why good intentions can put consumers in an even bigger hole than before. Don't miss Digging Out Of Personal Debt.)
However, it is possible to enjoy a very merry Thanksgiving and Christmas without flushing your finances down the drain. Here are eight simple ways to trim down your holiday budget this year:
- Buy In Bulk With A Friend
Consider shopping at a buy-in-bulk warehouse store for your Thanksgiving and Christmas meals. Okay, so you probably don't need five pounds of green beans or a case of stuffing. Take a friend or two along with you. You can split the bill and then divvy up the food between your families. (Find out why getting more for less isn't always a great deal in The Dark Side Of Bulk Buying.)
- Take A Pass On The Mega-Bird
While you may be tempted to buy the most massive turkey in the bunch, try to be sensible. The rule of thumb is to buy one pound of turkey per person, or two pounds per person if you want lots of leftovers. You'll save money and you won't end up tossing out loads of dried-out turkey a week later.
- Throw A Potluck Turkey Dinner
If you're having family or friends over for Thanksgiving dinner, don't feel like you have to bear the brunt of the cooking. Ask each person to bring a side dish, dessert or appetizer. Not only will you save oodles of cash, but you won't have to spend as much time in the kitchen. (Your holiday party doesn't have to hurt your wallet. Find out how in Host A Holiday Party For Less.)
- Get A Head-Start On Christmas Shopping
Don't feel like you have to wait until after Thanksgiving to start your Christmas shopping. Hit the stores now! The sooner you start searching for gifts, the more time you'll have to bargain hunt.
- Hit The Thrift Stores
Don't be ashamed to buy second-hand gifts for your family and friends. Comb through consignment shops, thrift stores, yard sales and flea markets for the perfect present. Not only will you save a bundle, but you may just find some truly unique gifts that aren't available in a typical department store. From antiques and collectibles to vintage jewelry and limited edition books, you could score some seriously distinctive treasures in a second-hand shop.
- Give Out Home-Grown Gifts
Consider making gifts for your relatives and friends. Try to get creative and tap into your talents. Are you a gifted painter? Paint a landscape or portrait for your mom and dad to hang in their family room. Are you a fabulous baker? Bake a tasty pie or delicious cookies for your neighbors and friends. Can you knit like a pro? Knit socks, winter hats or sweaters for your nieces and nephews.
Often, a one-of-a-kind home-made gift is even more special than a generic store-bought present. (For more tips, for a bountiful Yuletide on a Scrooge-like budget check out Avoid Overspending This Holiday Season.)
- Just Say No To Christmas Cards
If you're strapped for cash this holiday season, just forget about the Christmas cards. While holiday cards are a nice gesture, the expenses can add up quickly. First, you have to buy the cards (or have them custom-made with a family photo), and then you have to pay for postage to mail them to family and friends. It's a double-whammy to your wallet. Anyway, do you really need to update your friends and family with a form letter about little Johnny's latest football accomplishments, Suzie's straight A report card and your recent bunion removal surgery? Give your friends and relatives a call this holiday season instead. After all, Great Grandma Ruth would probably prefer to hear about your family's latest shenanigans straight from the horse's mouth. If you simply can't bring yourself to get rid of holiday cards altogether, consider sending e-cards instead. Simply attach your family holiday photo to an email with a clever Christmas message and send it out to all your family and friends. Voila! It's simple and free.
- Stick With Last Year's Decorations And Attire
Before you run out and buy all new Christmas décor in this season's hottest holiday colors, take stock of the decorations you already have. Do you really need to all-new wreaths, tree lights and snowman figurines? Probably not. Even if Pottery Barn claims, "Silver and plum are this season's must-have colors!", don't bend under the Christmas catalog pressure. They just want your money. Stick with last year's decorations, and you could save hundreds of dollars. And while that Rudolph sweatshirt with the light-up nose may be calling your name, take a pass on it. Not only will you save your kids from unthinkable humiliation, but you'll also save $30 or more. Anyway, if you really want to embarrass your children, your Santa sweater from last year will do the trick.
The Bottom Line
It's easy to get sucked into a whirlwind of overspending during the holiday season. However, with a little bit of planning and a lot of self-control, you can keep your spending under control this year. Follow these eight easy tips, and you'll be certain to slash your holiday budget and avoid that dreaded post-Christmas debt hangover.