Christmas is around the corner, and a lot of us already are planning or planned our Christmas vacations, family reunions, and of course what gifts are we going to give. But let me ask you this question; did you plan for your Christmas budget? Do you plan for it as well? Do you let your credit card companies plan it for you!?
If you are letting your credit card companies handle your Christmas expenses, then by the end of Christmas you will definitely be in debt.
What our Culture Says About Christmas?
Our culture says Christmas is all about giving
We see it on TV commercials, we see it posted on our social media, we see it on posters on every single corner of malls and indeed Christmas is about giving and they are right! But did you notice that every time you see or hear commercial about Christmas there is also a pitch that their product is the perfect gift, that their offerings will make you satisfied, that their services will make you happy?
Commercialization of Christmas
Companies manipulate our emotions to trigger a transaction
Unfortunately, Christmas is heavily commercialized! Advertisers use images or slogans that target our basic human needs; wanting to be love, stability and comfort and longing for acceptance.
They show happy faces of loved ones after they receive the “perfect” gift. They advertise people’s “emptiness” being satisfied after using their product.
They highlight how their products make a person a hero of his/her community.
These “perfect-moment” scenarios encourage us to buy their products because who doesn’t like to have a perfect life, right?
These advertisements are sad because it makes us believe that Christmas is about giving or receiving material things. Kids these days disrespect their parents or shows unacceptable attitudes if they don’t get the toys that they wanted. Teenagers talk ill of their parents to their peers if they don’t get expensive gifts. The worst part is parents either work their butt off doing overtime or put everything on credit card just to buy the latest and shiniest object they could find.
Christmas is way more than that!
It is all about giving a quality time to your loved ones. It is sharing what you have to less fortunate. It is about extending hope to are struggling in life. It is about bringing joy to who are lonely. It is about the gift of life through the birth of Christ.
Now, the purpose of this article is not to criticize how companies distorted Christmas so they can profit from us. I am writing this article to help you minimize or eliminate the financial burden the Christmas season brings and hopefully truly enjoy the meaning of Christmas.
Are you financially prepared for Christmas?
The best case scenario: Celebrate Christmas the way it is originally meant to be.
The best case scenario that I am hoping for us is we will finally stop allowing big companies to bully us. We will choose not to be pressured to buy their products (if we can’t afford it) and we will keep our Christmas simple. We will teach our kids that Christmas is not about receiving fancy things but it is about giving value to other people’s lives. We will spend quality time with our family and friends and give them simple but meaningful gifts.
Plan B: Protect Your Finances, Shop Responsibly
If the best case scenario is simply not for you I have a plan B for you. Below are some simple steps that you can take to protect your wallet from the greedy hands of multi-million dollar companies (Have you ever wonder how they amassed that big fortune?)
How to prepare financially for Christmas
Determine how much you are going to spend this holiday
According to pwc Canada, Canadians are expected to spend about CA$1563 this year. Around 41% (or CA$ 625) of that will be spent on gifts, 46% (CA$ 720) will be spent on travel expenses while 13% (CA$ 198) will be spent for entertainment. In contrast, our neighbors down south are expected to spend $885 this Christmas on gifts alone according to Investopedia.com
We need to know this average spending on Christmas because we want to plan how much we should be spending. Once known, the next thing we should do is to determine if we can afford to spend more or less than the average.
Note that the median household income of Canadian household is CAN$70,336 as of 2015 while the median household income of Americans is US$59,039. This is important to know since if your household income is below the nation’s average then your gift spending should be below as well. Likewise, if your income is greater then you have more room for spending.
Once you decided how much you will spend, then I urge you to save that amount if you still haven’t. Yes, I know there is only one month left so you will need to step up your game. Below are some ways you can do to save up or raise up some cash.
- Do some extra shifts prior to Christmas vacation
- Apply for a seasonal work position
- Open an Ebay or Facebook Market account and sell some of your unwanted or unused things
- Go on fasting for one month; avoid eating out
- Freeze your subscriptions for one month
Create a shopping list
I have a quick quiz for you!
There are two shopping buddies who go to the same mall and buy from the same stores. Shopper A is a bargain hunter. Shopper B is a shopping list nerd. Who will save more?
Now, I don’t have a statistics to back this up, but let me use my personal experience to answer this question instead.
- I impulse buy when I see items on sale.
- I buy more than I need since I don’t have a “known” budget limit. I tell myself, “I don’t need this but it is 50% off. Better buy now and use it later”. The grim reality is I will not use it after I open the package.
- I suddenly want to gift a random acquaintance after seeing an item that he/she will probably like.
- I walk around the mall for hours, I get hungry, I reward myself with a delicious pricey food since I shop “wisely”.
So the answer who will save more? The Shopping List Nerd!
By creating a shopping list, you will help yourself decide in advance whether you want to buy something or not. It will help you stick to your budget, you will buy only the things that you really need now, gift the “necessary” people in your life.
Also, you will have a chance to research retail prices if you make your shopping list. Look for the best deals ahead of time and try to determine if they are REALLY the best deals. Sometimes stores mark the prices up prior to putting it on sale.
Use cash or at least debit card, avoid using your credit card
Again, let me remind you that my goal for writing this article our goal is to make sure that Christmas will not make a huge dent on our wallet.
We are more likely to stick with our budget if we use cash simply because we can physically see our cash getting depleted. As our money gets depleted, our brain sends a signal that triggers us to conserve what we have left.
This is not true with plastics. Research shows that there is no spike brain activity or whatsoever as we tap our credit card on the machine. In other words, the use of plastics does not trigger any signal that helps us conserve which is bad because our money is a very finite resource.
Christmas is meant to be spent with families and create special memories. There is no need for us to be pressured to spend a lot of money to make Christmas special. It is more important to take care of the health of our personal finance because it directly affects the quality of our life.
In situations where spending cannot be avoided, then at the very least, make a Christmas spending plan!
Again, determine how much you are willing to spend beforehand then try to save up for that money before Christmas comes. Do not rely on credit cards for your Christmas spending especially you are not capable of paying it by the end of the month. Remember! Paying 20% interest is absurd.
Other tips that will help you stay on your budget includes using cash to pay. If you really do not want to use cash then get gift cards. The point why we need to do this is it triggers us to conserve as our resources dwindle or depleted. Finally, do not underestimate the magic of creating a shopping list. Not only it will save you time and effort, but it is also most importantly going to help you stick on your budget/
What about you, friend? Do you have some Christmas shopping hacks that help you save money or let you stretch your budget? If you do, then I encourage you to join the conversation and share it below!
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Thank you very much and I hope I am able to add value to your life today!