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Control Christmas Spending
How to Control Christmas Spending
It's time for merchants to start advertising for Christmas sales.
Merchants earn up to 80% of their annual profits from Christmas sales. So, it just makes sense for merchants to encourage motivated spenders to visit their stores.
And, that's great news for merchants. But, what about you, the consumer, the one whose spending all that money?
If your Christmas spending sometimes seems out of control, it's time to reign in your spending.
I know you're going to respond with, "But, it's Christmas! People expect to receive gifts. I can't just refuse to give gifts. Everyone would think I'm a Scrooge!"
OK. But, for many people their Christmas spending isn't paid off until sometime in June. And, all along the way there are interest charges on all the credit cards with remaining balances.
The average family spends over $850 on Christmas gifts. And, if you have an exceptionally long gift list, you're probably spending more.
That would be great if you planned to spend that amount of money during the year. But, most people just don't create and stick to a workable budget. As a result, they go into ever increasing debt.
Credit card companies love Christmas. That's when people really splurge. Their interest profits go right through the roof. And, with credit card interest rates starting at 15% to 18%, why shouldn't they be happy?
So, what's a person to do?
The first thing to do is to realize that Christmas is primarily a commercial holiday. The ads on TV, in the newspaper, and on radio are fueled by the desire of merchants to make 80% of their profits during this wonderful season. You're made to feel guilty if you don't fully participate.
The second thing to do is to decide exactly how much you can afford to spend without going into debt. This means you'll need to construct a budget. Determine what your income and expenses are. They determine how much is left over for gifts.
Next, take the list of people you typically give gifts to and prioritize the list. Determine who you really want to give fits to. And, estimate the cost of the gifts to those highest on your list. Are you still within your budget?
Finally, since it is still early in the season, call those lower on your gift giving list and let them know that you won't be able to give them gifts this year. And, ask that they not make you feel uncomfortable by purchasing gifts for you and your family.
You'll dread making those calls. But, consider that each call may save you $50 or $60 of direct expense plus an additional $20 or so in interest expense.
No, the merchants won't have the merry Christmas they expect. But, you will.
And, your happiness and freedom from debt will last throughout the year.
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