How to gift yourself a debt-free holiday
Ever wonder why Elvis had a blue Christmas? Why Frosty the snowman was in such a hurry to leave town? Why the Grinch was so grumpy?
Maybe they were worried about Blue Monday. Landing on the third Monday in January, it’s also called the “most depressing day of the year.” That may be because it’s the dead of winter, but it also happens to be right around the time that holiday credit card bills arrive.
Consider this. If you buy $1,500 in gifts on credit this holiday and then pay only the minimum of $47.50 each month, guess what? It will take you 14 years to pay off the balance, including $2,556.67 in interest.1
Blue and grinchy, indeed. But it doesn’t have to be that way. Here are some tips on how to have a holly, jolly and less stressful gift-giving season.
Start early, early, early
Overspending on last-minute gifts is an easy way to blow your budget. Don’t be that crazed person racing through the mall on Christmas Eve. Challenge yourself to wrap it up by December 15.
Buy yourself a prepaid gift card
It’s a smart way to cap your holiday spending. Set your dollar limit for gifts, and then buy a prepaid general-use card in that amount. When it’s used up, you’re done. Some cards even qualify for rewards or a discount — a bonus for your thriftiness.
Layaway in a manger
Go old-school to avoid credit debt and interest fees. Layaway — putting a down payment on an item and paying it off, interest free, over time — is popular again.
Join the club
Ever hear of Christmas Club accounts? Invented during the Great Depression, these temporary savings accounts let you deposit money all year and then withdraw it at holiday time with no fees. Many credit unions still offer them. Or just create your own specialized savings account.
Guide someone’s sleigh
Rudolph had the right idea — a temporary holiday gig in the shipping business. Why not pick up some extra cash to pad your Festivus gift fund? You don’t have to be a reindeer to find work in shipping over the holidays; check out local stores — retailers usually hire seasonal workers every fall.
DIY instead of IOU
The web is full of crafty projects, from apple jelly to wacky wreaths, that you can make at home. You’ll save big bucks on your Kwanzaa gift list while adding a lot of heart.
Finally, consider applying these saving and spending practices post-holiday season. The more you’re able to stash away by changing some simple lifestyle habits, the more cash you’re likely to have to spend on worthwhile experiences throughout the year.
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