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Surviving the Holidays Without Going Into Debt

November 6, 2006

By: Jim Oosterman
Melrose Bank

With the Holiday season rapidly approaching, you may be worrying about gift giving, and the financial impact this may have as you enter into the New Year. You can have a wonderful holiday season without spending a lot of money. By planning and following these suggestions, you can ring in the New Year debt free, and truly enjoy the reason for the season.

#1. Have a budget and make a list
Take the time to put together a budget and make a detailed gift-giving list. Include the name of the person, the type of gift, and the budgeted amount. Budget for items such as gift wrapping, holiday cards and stamps, and holiday meals. Making a list gives you an overall view of what you have to spend. You may find that you will have to cut back this year, if you are going to stick to your holiday budget and not incur debt. The next step is to make a vow that you will not go over your budgeted amount. Should you spend more on a gift than was budgeted, make sure you spend less on another. When you shop, take your list with you, crossing off items as you purchase them. This will help you avoid making impulse purchases, which can quickly ruin your plan.

#2. Take advantage of sales and early shopping
Take advantage of shopping early to find better deals, and avoid last minute purchases that can be costly. Time constraints and last minute occurrences do happen, so plan your time accordingly. Use coupons and be on the lookout for sales and clearance items. Take advantage of stores and online sites that offer free gift-wrapping and shipping services. If you need to mail gifts, do so early, to keep shipping costs down. To save on children's gifts, head to flea markets, yard sales and consignment stores. Many toys and games can be found in their original packaging for much less.

#3. Be creative
If you have a skill or hobby, consider making some of your gifts. Use jars, tins, boxes and craft bags, with pretty ribbons and trims to make a nice presentation for your hand-crafted gifts. Use last year's holiday cards as gift tags, and the Sunday comics to wrap children's presents. Consider gifts of your time, such as planting a garden, doing carpentry or plumbing work, or pet sitting for a long weekend for your relatives and friends. These are excellent gifts that do not cost a lot, and mean a great deal. For those who have everything, donate to their favorite charity or organization.

#4. Carry only two credit cards
It is preferable to use either a debit card or cash to pay for purchases. However, if you are going to use credit cards, use one with a zero balance that you will pay off immediately. As a last resort, and only for more expensive purchases, use a low interest rate credit card that you can pay off over a short period of time. Do not apply for credit cards before you do your holiday shopping. Doing so will lower your credit score. Keep all other credit cards at home. Be sure to keep all receipts, and record your debit purchases as if they were a check. Double check your receipts when you get home and again when statements arrive, because although rare, mistakes can happen. Avoid using department store credit cards unless you can pay off the balance, as these cards have higher interest rates.

#5. Beware of budget busters
It is tempting to make unplanned purchases during the holidays. We are inundated with holiday displays and merchandise beginning in early October. There is constant pressure to spend, and advertisements seem to convey that the more expensive and extravagant gift you give, the better. Stores set up their holiday displays as triggers for you to spend more. Giving in to these pressures is an emotional reaction, but a powerful one. Being well rested and nourished when you shop will help you stick to your budget and avoid merchandising triggers. Try to avoid running around on your lunch hour or evenings after work to do the bulk of your shopping. This can be exhausting and stressful. Purchase gifts online or through catalogs to help you save time, money, avoid stress, and impulse purchases.

#6. Relax and enjoy the holiday season
The majority of the holidays occur between Thanksgiving and the New Year, but the holiday season can extend well into the month of January. You can start your own traditions with friends and relatives after December 25th by shopping during the January sales and exchanging gifts at another time when things become less hectic. Take time to enjoy your family and friends during the holiday season by creating a warm and relaxed environment, and remembering what is important to you. By following these suggestions, you can have a joyous holiday season and feel even better about yourself and your debt free accomplishments when the New Year arrives.

James Oosterman is the Vice President of Melrose Bank. He can be reached by telephone 781-665-2500, online at or on Facebook at

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