A Five-Step Spending Plan to Avoid Holiday Debt

By Kristin Dohn

The holidays can put a financial burden even on the savviest of shoppers and savers. But like most things, taking time to plan can help you avoid the stress that comes with overspending. Before you hit the mall or shop for holiday deals, keep reading to learn how to make a holiday spending plan that works for you.

1. Set a Budget

First, make sure you account for all of your typical expenses so that you don’t come up short on bills or things like rent. Next, think about what else you may be spending on in the coming months. Are you hosting a party at your home, or traveling to visit family or friends? If so, estimate what those things will cost you. Once you’ve subtracted any expenses from your usual budget, you can think about how much you have to spend on gifts. It’s best to start planning this as early as possible. That way you can look at how much you’ll earn between now and the holidays and calculate how much you can save to cover your holiday spending. Being realistic about your budget will help make sure you don’t overspend. Try our budgeting tool.

2. Make a list (and check it twice)

With all of the excitement of the holidays, it can be easy to get carried away. Make a list of the gifts you need and cross them off as you go. Check your list several times before you go shopping so that you don’t leave anything off. This is when a personal rule may come in handy. You might set a personal rule for yourself, such as: If something isn’t on your list, don’t buy it. This can get difficult when you see sales and deals pop up—but spending on something you don’t really need can make it difficult to pay for the things you do. Try our spending worksheet.

3. Get creative

There may be ways to give a meaningful gift at a fraction of the cost as buying something from a store. This may not work for everyone on your list, but here are some low-cost suggestions that CFPB employees have used:

  • Homemade mixes in a mason jar, such as hot chocolate, bean soup, or cookie mixes.
  • Your favorite recipes with photos in a custom picture book.

4. Decide how you’re going to pay

Are you going to use cash or credit cards to pay for gifts? A helpful rule to set for yourself is to only bring the amount of money you plan to spend. That way you can help yourself stay within your budget because once you spend the money you brought, you’re done. On the other hand, using a credit card can give you more consumer rights if the item is broken when you open the box and doesn’t require you to travel with large amounts of cash. If you do decide buy your holiday gifts with a credit card, make sure you have a specific plan to pay your credit card bill and have set aside enough in your budget to do so.

5. Track your holiday spending

Just like you wrote down your lists to keep track of what you need to buy, you could also keep track of what you’ve spent. Periodically check to see if you are on track and sticking to your budget. Did you spend more or less than you thought you would on certain items? If you don’t keep track of what you spent, you could end up with an unpleasant surprise if you exceed your budget.

​Read More

Putting The Brakes On Impulse Buying

By Jim Garnett

“Impulse buying” has become a contributing factor to why many people fail in their attempts to maintain a semblance of a budget. And what is impulse buying? It is “the buying of goods or services without planning to do so in advance, as a result of a sudden whim or impulse.”

A recent study reveals:

90% of all shoppers make occasional impulse purchases that they didn’t intend to buy initially.
40% of all consumer spending is prompted by impulse buying.
54% admitted to spending $100 or more on an impulse buy.
20% admitted to spending $1000 or more.

Although we say we believe “money can’t buy happiness,” the primary reason listed for impulse buying is, “it makes me feel better.” There is no known vaccine to immunize us from impulse buying, but there does seem to be a simple method we can use to help us “apply the brakes.” This method utilizes memorization of one or two questions we ask ourselves prior to making a purchase.

Asking ourselves a question slows us down just long enough to catch our breath before we buy. Doing so has proven to be a great deterrent to blindly following our impulses. Choose only one or two questions from the list below, and practice asking yourself that question(s) the next time you go to buy something. You will quickly find that doing so will slow down the buying process and give you a chance to evaluate your financial choices better.

10 Questions to Slow Down Impulse Buying

1. Is this item on my list? Making a list before you shop is one of the greatest deterrents to impulse buying.
2. Am I buying this because of my mood (hungry, tired, angry, sad, guilty, bored, or excited)?
3. Am I buying because it is on sale?
4. How many hours must I work to pay for this?
5. How many times will I use this?
6. Am I buying this to impress somebody?
7. Where will the money come from to pay for this?
8. Do I already own something similar to this?
9. Could this item be out of style soon?
10. If I wait 24 hours, would I still buy this?

We are not advocating that every impulse buy is wrong. But since most of us work hard for our money, we owe it to ourselves to “stop and take a deep breath” before making quick purchases. If it is a good buy, no harm will be caused by “putting on the brakes.” Afterward, we will be thankful we did.

​Read More

Ask Chuck: Avoiding The Christmas Spending Trap


By Chuck Bentley

Dear Chuck,
The commercialization of Christmas feels like a big financial trap! My husband and I want to show love to our kids and family but the pressure to spend and borrow just to put a bunch of packages under the tree seems ridiculous. Any advice for stressed out parents like us?
Bah Humbug!

Dear Ebenezer’s Kin,
Just kidding about being Ebenezer’s relation; here’s a high five for asking what so many others are probably thinking and feeling right now. I understand your pain and will offer some perspective and practical help. I love Christmas – the lights, music, food and celebrations! They are reminders of how our world was changed by the most significant birth in history – the arrival of Jesus Christ. Christmas provides opportunities for families and friends to reunite while offering a pleasant break from routine. Yet, many, in their desire to be generous and loving, have sacrificed all sense and good judgment.

I agree with your observation that the way Christmas is promoted and marketed is a gross commercialism of Christ’s birth. People indenture themselves to creditors for an entire year to buy “stuff” they think will bring happiness to others. I did a little research to see if this was just our sentiment or real life events. A 2017 Consumer Holiday Shopping Report revealed that more Americans are finding themselves in debt because of holiday shopping. Credit card debt rose 8% from 2015 to 2016 and not all of it has been repaid! (If you, or someone you know, are dealing with overwhelming credit card debt, get in touch with Christian Credit Counselors. They’ve been our trusted partners for years and can help you pay off your debt the right way.)

Last Christmas, 63% of Baby Boomers, 58% of Generation-Xers, and 40% of Millennials took on debt. The average person thinks the most they’ll spend this year is $660, with Baby Boomers at $802, Millennials $434, and Gen Xers at $679. Many parents feel pressured to give their children whatever they request. They overextend by failing to plan. They want their children to fit in with their peers and attempt to eliminate feelings of guilt, so they overindulge.

Let’s consider some possible solutions for avoiding the debt trap at Christmas:

1. Pray and seek guidance from the Lord
2. Reset priorities and adjust lifestyle
3. Renew your mind with truth
4. Seek accountability with a trusted friend
5. Plan ahead
6. Budget
7. Pay cash
8. Avoid social media
9. Take on extra job to avoid debt
10. Sell some stuff
11. Build savings now for next Christmas

I have recently written a post offering alternative gift ideas that will possibly be more meaningful and certainly less expensive. I hope you’ll find it very helpful.

Regardless of what we spend, there’s an enemy dedicated to destroying us. We must draw battle lines and reject the lie that debt will bring happiness. Or, that expensive gift is the only way to bring joy to a loved one. Let’s set our hope on God, “who richly provides us with everything to enjoy.” (1Timothy 6:17b ESV) He is trustworthy!

​Read More