How’s that Christmas shopping coming? What? It’s only August? I know. But really, how’s that shopping coming?
It might sound crazy, but now’s the time to start, unless you are way ahead of the game and already started. You don’t actually need to wait until November (or even worse, December!) to start that shopping.
Spreading out the gift shopping can take a lot of the stress out of the holiday season, both emotionally and financially. It just takes a little planning ahead. Rather than running around trying to shop and plan and cook and decorate and wrap, wouldn’t it be nice to have at least some of that out of the way?
We have about four months to go. So it seems like Christmas is a ways off, but really? Right around the corner. And it’s not too early to prepare. Write out your shopping plan. Who will you be buying for and how much will you be spending?
Buying one or two gifts a month throughout the year means it’s less likely you’ll be putting a ton of presents on the credit card, because you aren’t going to need to put all those expenses in one month. It also gives you more time to shop thoughtfully, and get a gift that really means something rather than a pile of stuff. The one thing you have to really be careful of is that you either wrap the presents now, or make sure you have a good hiding place! But not one so good that you forget where you stashed them!
If you like doing all your shopping in the holiday season, then one option is to set aside money each month for shopping. When I was young, I remember banks had what was called a Christmas Club. You would put money in each month throughout the year, and then when it came time to shop, there was a tidy sum to spend. It’s a little late to start that for this year, unless you aren’t a big spender, but whenever or however you do it, spreading out the expense (and the work!) of buying Christmas gifts can make a big difference in the long run.
When we are working on budgets with clients, we take a big expense like Christmas and put the monthly average in the budget. The thinking behind this is just like the Christmas Club. If you normally spend $1200 on Christmas, that’s $100/mo. It’s easier to manage $100 in one month than $600 each month in November and December. And so that means less likely that you’ll end up charging that or going in the hole to cover it. Here’s an example. Using an online minimum payment calculator, a balance of $1000, an APR of 18%, which is about average, and a minimum payment of 3%, I clicked the magic button and found out that it would take 59 months to pay off that much Christmas debt. That’s right. You could be paying for this Christmas for the next FIVE Christmases. Plus another $497 in interest! For all practical purposes, that’s half again the original balance in interest alone.
So while you are out shopping for school supplies or hitting the end of summer clearance sales, keep your eye open for the perfect gift. And give your self the gift of a less stressful, less expensive holiday season.
If you want help setting up that Christmas budget, or coming up with a spending plan, the counselors at the Center for Financial Resources are here to help. Contact us at 1-888-258-2227 or www.lsssd.org to set up an appointment.
Written by Sylvia Selgestad, Financial Counselor and Educator
Photo credit: newroads.ca
LSS Center for Financial Resources
Consumer Credit Counseling Service | Housing Resources | Sharpen Your Financial Focus | Financial Fitness Education
705 East 41st Street, Suite 100 | Sioux Falls SD 57105-6047
605-330-2700 or 888-258-2227
Strengthening Individuals, Families & Communities