Monday, October 06, 2008

Don't Get a Christmas Debt Hangover

According to Wikipedia, "Consumerism is the equation of personal happiness with the purchase of material possessions and consumption" or "retail therapy" as my wife calls it. This results in an odd phenomena I often see debtors go through this time of year: guilty over not being able to purchase Christmas presents for friends and family. We often end up counseling clients that regaining control over their finances is more important than buying Christmas presents.

When January rolls around, will you be suffering from the guilt of a Christmas debt hangover? These tips should help prevent a holiday financial catastrophe:
  1. Reduce your gift exchange list. Do you really need to to purchase gifts your 3 aunts, 2 uncles, 10 cousins and the odd assortment of nieces and nephews? Probably not. Just be honest with your friends and family and exchange greeting cards instead.
  2. Budget, budget, budget: Make a list of who you really must purchase gifts for, set a dollar limit and stick to your budget. After you make your list, refer to Rule No. 1.
  3. Don't use credit cards to purchase gifts. Unless you are the type of person who is extremely disciplined and pays off the credit card bill each month after accumulating airline miles, avoid the temptation to delay paying for the purchase. If you do purchase a Christmas gift on a credit card, refer to Rule No. 1.
  4. Shop online instead of at the mall. Shopping at a mall can often lead to those impulse purchases that you end up regretting later. Take the time to research your purchase carefully. If you shop online, only use a well-established website such as Amazon.
  5. Host a holiday pot luck instead of exchanging gifts. Christmas memories of pleasant times with friends and family will last longer than a forgotten trinket.
  6. Buy smarter. Clip coupons, search the Internet for bargains and watch your Sunday paper for holiday sales.
  7. Start buying now. If you purchase your gifts early and a few at a time, you'll be under less pressure closer to Christmas and less likely to overpay for an impulse purchase.
  8. Avoid Starbucks. Instead of spending money on a $5 latte, save that money for Christmas gifts. You would be surprised how quickly the cost of self-indulgence adds up.
  9. Buy gift cards. You typically spend less on a gift card than a present and the recipient can choose choose something they want.
  10. Avoid the extras. Christmas is the time of year for "extras"...that one little extra decoration, the stocking stuffers, the last minute gift that seems so perfect. Refer to Rule No. 1 and Rule No. 2.

True friends and family don't want you be stressed or overcome by holiday debt. Spend wisely and without guilt.

About the Author: Carl H. Starrett II has been a licensed attorney since 1993 and is a member in good standing with the California State Bar and the San Diego County Bar Association. Mr. Starrett practices in the areas of bankruptcy, business litigation, construction, corporate planning and debt collection.


Anonymous said...

Thanks for the sanity during the holidays. It is so sad that people get so wrapped up in the commercialism of the holidays, that they spend the rest of the year paying for them. We need to remember the real meanings of Thanksgiving and Christmas, and spend time with our families and friends, trying to live them out.

Unknown said...

Homemade gifts go a long way and the cost is far less than a standard gift. Shopping is fun, but making a personalized gift is even better! Inspired by a just couple years ago when we had a new baby and were dirt poor, I made Earl Grey tea cookies and a "holiday blend" coffee (a nice inexpensive ground coffee to which I added nutmeg and cinnamon). Our family was so impressed and it was a gift which lasted beyond the holidays as every time they used/ate their gifts, they thought of us!

We're not sure what we'll be making this year, although since we have a little more money, making a special mix or blend to meet the favorite foods of our individual family members will be even that more fun! You don't even have to have the ability to cook or bake as the "cookie mix in a jar" (where you layer dry ingredients and they add the wet when ready to cook) is a wonderful gift!

If you personalize it and make it reflect your family (handmade tags, cards, etc.), I promise that your friends and family will appreciate it as much as they would the newest gadget or DVD!