Hard Decisions...Tips For The Recessed Holiday

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As the economic downturn threatens the livelihood of your family, you realize that hard decisions are on your Christmas horizon. From gifts to decorations, from parties to winter vacations, this article thoughtfully discusses the recessed holiday.

The troubled economy is a warning sign for some consumers and a temporary pothole for others. What really troubles retailers is how little people might be able to spend on Christmas. When you look at your budget, you can’t ignore the signs of this failing economy. In keeping with the times, force yourself to be practical.

Make tough decisions that will help you avoid a debt crunch in January. You don’t want to max out credit cards or take a payday loan that comes due after the New Year. If your budget is stretched to the limit before holiday expenses, where do you begin?

The recessed holiday season is a good time to work with a list, a centuries-old tool for cutting costs. Your list for Christmas spending should be all-inclusive. Here are some things to include on your holiday expense list:

1. Eats. You may find there are many food costs, including eating out with special guests, cooking Christmas Eve and Christmas Day meals, and giving or contributing to a holiday party. Don’t forget bringing food to other parties your family is invited to, including school, work, church, and social events.

2. Gifts. This is the hardest list to make. It helps if you stick with a list of who you will buy for and how much you will spend for each person.

3. Greeting cards. This expense can be eliminated altogether this year if you send e-cards, or you can make your own cards.

4. Gift wrapping. You can spend on gift wrapping, or you can use household materials, including brown paper bags, newspaper, magazines, fabric, tissue, and stationery. When you look around the house for wrapping materials, you might also locate some potential items for re-gifting.

5. Home décor. Your home probably already has enough décor to manage this season. If you can avoid this expense altogether, you will have more money for gift spending, meals, and entertainment.

6. Charity contributions. The Christmas season falls near the end of the tax year. Many taxpayers use the holiday as an opportunity to give charitable contributions and write them off on the tax return. If you don’t have extra money this year, you can scale back your charity giving to a small amount or eliminate this spending category entirely.

7. Travel. Consider the big question. Is your family going to travel over winter break? If you’ve already paid for travel, you are stuck. Be sure to include in your budget how much you will spend on the trip for meals, gratuities, entertainment, and incidentals.

8. Packaging and shipping. You can drastically slash this spending by mailing gift cards or sending gift cards electronically.

9. Loss of wages. Some workers don’t get paid for holiday closings. If your wages drop in December, this condition affects your available cash for the month.

10. Energy. The cost of keeping Christmas lights on outside your home should be considered. Two other possibilities are the cost of firewood and gas for holiday errands and events.

11. Entertainment. This is a great category in which to save money. Use the Internet and the local newspaper to find free entertainment for the whole family. If you mark it on your calendar, you will have ways to entertain guests without breaking your budget.

When you’ve completed the list of expenses, take a red marker and cross out the expenses you can avoid this holiday season. Next, rank the importance of the remaining expenses from most important to least important.

Your final step is to look at your savings, your paychecks in December, the bills you must pay, and your available credit on credit cards. The final result, or your available cash, represents the maximum you can spend on holiday traditions.

Make your list of expenses equal your available cash so that you don’t break the bank. Happy spending for the recessed holiday!

By Angela Baca