How to avoid credit card debt this Christmas
Filed under: Bargains, Shopping, Simplification, Technology
For many people Christmas is a time to give generously to friends and family, but if you haven't been saving throughout the year it can be easy to rely on credit cards and overspend; leaving you with a big bill come January. Thankfully, you still have a few months until Christmas so there's time to get your gifts without going broke.While you'd be better off if you started saving in March, Spend On Life has pulled together 10 ways to avoid Christmas credit card debt, which it estimates will net you $750 toward Christmas gifts in the next two-and-a-half months.
Spend On Life's first 3 steps revolve around cutting back on food, coffees and pampering, which they estimate can save you close to $500. Cutting back is a great place to start and thanks to the intelligent tagging in personal finance apps like Quicken Online and Wesabe, you can identify how much you spend in each of these categories and prioritize your cutbacks. These tools also make it easy to look for subscriptions that you can trim for the holidays.
For example, if you drop your Netflix plan down to 1 disc out and rely on streaming to watch movies you can save about $40 by Christmas,and if you stop your two-at-a-time GameFly subscription you can save between $20 and $60. One word of caution about cutting back is to do it realistically; if you cut too deep you're much more likely to splurge after a month and a half of living super frugal.
Two more great ways to save money on Christmas gifts from Spend On Life include giving as a group and using a gift giving game. Giving as a group is experiencing a surge in popularity in the recent years and now companies that sell high priced items are making it easier to do. Best Buy, for example, offers a "Pitch In" Gift card service (Launching next week) that lets family members and friends pool resource to fill up a gift card without shuffling money around or planning out amounts.
Technology has also made setting up a gift giving game like Secret Santa super simple. Evite.com provides a handy getting-started guide that lets you invite others to take part in the exchange and then keeps identities a secret when it informs the secret Santa's about their gift recipients.
Spend On Life included my No. 1 tip for buying Christmas presents, bargain hunting, to their list. While some people may look down on shopping from the clearance rack for gifts, let me assure you that there's no shame in saving big when giving gifts; especially since the clearance stickers peel right off!
Don't be fooled into thinking that the best sales will come after the holidays. I've already finished one person on my list by picking up a clearance item at Hallmark and a Hannah Montana Mall Madness game for 75% off at a local game store that just moved in for the holidays. So come Christmas I'm going to look mighty generous, but the $75 worth of gifts only cost me $14!
Other great ways to save on gifts include looking for coupon codes that can easily save you 5-30% on gifts! If your recipient isn't on Twitter, it's another resource for finding deals on gifts. You may see good deals from your followers, like a Wii with a $25 gift card, or you can ask your followers where to buy something to get the lowest price.
You should also learn when it is the best time to buy. Checking out our Black Friday 2009 predictions will give you an idea of how low many items like GPS units, laptops and MP3 players will go and you'll learn when it is the best time to buy an HDTV.
With these tips, and the rest at Spend On Life, it's easy to stay under budget and avoid having a "Credit Card Christmas" this year. While Christmas shopping is fresh in your mind create your own Christmas Club savings account at a bank like HSBC or ING. Not only will you enjoy decent interest rates but you can have a small portion of your paycheck put in each month via direct deposit ,and come this time next year you won't have to worry about where gift money will come from.
Reader Comments (Page 1 of 1)
10-08-2009 @ 9:59PM
JulieNew Orleans said...
I also start saving coupons for all the foods I cook during the holidays. I purchase over the next 2-3 months and stock my pantry. I also take my own family christmas pictures and crop/alter them to look professional when I send them to family/friends. (these 2 alone can save me $50-75 dollars)
I started last week checking clearance racks for gifts. I also bought christmas wrap and cards last year for 75-90% off.
I dont have to buy them this year. (that saves me another
$50.00) Although I will spend about $500 on food/gifts/clothes,
I would spend at least $1,000 if I wasnt a thrifty shopper. I dont
use credit and it makes christmas alot merrier.
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10-08-2009 @ 10:00PM
Pat said...
These suggestions are good if you do them to begin with. But what about if you don't do netflix or any of the rest of that stuff. Then what?
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10-08-2009 @ 10:01PM
Josh Smith said...
Do any of the cutbacks to eating out, coffees or others at SpendOnLife fit?
You're best bet is to find some area you can cut back on. If that doesn't work maybe you can cut back on how much you give each person this year to make ends meet.
10-09-2009 @ 9:15AM
Connie said...
I am going to save this year by doing a white elephant party. Everyone brings a gift and gets a gift. This way we are not purchasing for the 6 brothers and sisters and the 9 nieces or 8 nephews. It is also hard to believe but you can usually find some great gifts or stocking items at the dollar stores..What ever happened to re-gifting, there are tons of Craigslist listings of great items for inexpensive things. Or better yet get crafty,handmade gifts are the best..
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10-09-2009 @ 9:15AM
Gary said...
Don'e spend coins except pennies. Throw the change in a jar and when you have $50, sell it to the bank and buy a Grant. You don'e miss the change, been doing it for years and it adds up to $400 to $600 per year. If you borrow from the jar, like for the laundromat, write an IOU and pay it back when you cash in. Actually quite painless.
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10-10-2009 @ 9:10PM
fallstonslowlife said...
Great way to save money using credit cards because they always seem to accumulate debt one way or another. If you're looking to make all of your purchases at one store or another like Kohl's for example it can be highly beneficial to take advantage of discount gift cards. At Gift Card Rescue I've seen them for like 20% off the retail price or more especially with the deals they have on twitter. 20% off a discount card plus in store holiday savings! It really cannot be beat
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10-09-2009 @ 4:03PM
elizabethinabox said...
@fallstonslowlife I agree they have a great system going on. I actually saw Kwame Kuadey on the show sharktank on ABC. Was amazing they got $200,000 investment into their business.
http://giftcardrescue.com
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10-09-2009 @ 8:19PM
melanie said...
My solution is to give a different kind of gift.
MerryRecession.com
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11-02-2009 @ 3:50PM
Greg Forester said...
Too cool!
10-12-2009 @ 10:42AM
regina said...
Josh: do you have any tips on using coupons as it relates to gift recepits? so, for instance, what generally happens if i use a coupon to buy a gift. if the reipient goes to return or exchaneg it, will they get the credit MINUS the applied coupon or coupon code?
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10-13-2009 @ 8:51AM
Josh Smith said...
I'm pretty certain they will get the amount minus coupon, but this is better than returning it without a coupon because then you are at the mercy of the lowest sale price in the last 60-90 days.
10-13-2009 @ 11:29AM
Greg Gebhardt said...
Best way to avaoid credit card debt is not to use them or do not spend more than you can pay off!
The biggest constraint on any working person is uncontrolled credit card debt!
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10-13-2009 @ 8:47AM
Bonnie said...
Our family draws names for all of the adults. This includes moms, dads, grandpa's and grandma's. Anyone who graduates from high school or is 18 or older and out of school is in the drawing. We still give to the kids but only grandchildren or children under age 18 and still in school. In the drawing we buy something for $20 and then have to personalize it or make it from scratch. Everyone loves it. Even the younger kids are just waiting to get in on it too.
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10-13-2009 @ 3:34PM
Bill said...
I found the best way to not charge this year. I didn't pay them last year and now they have losed my account.
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10-19-2009 @ 10:16PM
Limoman said...
WELL, SORRY, BUT OUR SOCIETY DEPENDS ON PEOPLE SPENDING.. NOT SAVING..
encouraging people to spend less this Christmass Holidy season is Self Defeating to everyone's Future, Job and to our Country...
Most might spend less and save it? But they will blow it on something else later..
and think if this.. When Inflation Hits, come this time next yr? Everything today is going to cost at least 10-20% more Next Yr!
So,you best buy your Big Ticket Items This Yr..
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10-19-2009 @ 10:16PM
James said...
I am wondering who, in his right mind, is using credit cards? They are only good if you pay the bill, in total, on time. That way it is about 30 days of interest free money. If you play it their way, you may as well be going to the local loan shark.
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