Keep the Joy, Ditch the Debt: Smart Spending During the Holidays

February 12th, 2013 posted by Faye Prosser

Picture this:

You are gathered together with your family while they excitedly open their holiday gifts. The anticipation of this moment has been building for months. Gift after gift, the kids move from one present to another, in a wild frenzy of unwrapping abandon. In some cases, they barely glance at the gift before they move to the next. When all is said and done, you are left with a huge pile of torn gift wrap and toys your kids may only play with once or twice. But there is one thing about the gift giving whirlwind that will make a lasting impression – your credit card debt. That $500 or more you spent on all those things will follow you for months and possibly years to come. The toys will be long broken, lost, and stuck in storage, but you will still be paying for them, plus interest. Sound like the picture perfect holiday? Definitely not. Unfortunately, for many people, this is exactly what happens every year in December. People get caught up in the joy of giving and end up spending well above their means. The result is that they continue to pay for those items long after they are discarded. If this is a familiar holiday scenario in your house, you will be thrilled to know that there are alternatives to “the spend and suffer” debt cycle.

If you sincerely want to enjoy a debt free, joy filled holiday, consider the following suggestions.

Agree on a Budget:

If you and your family and friends agree on a gift giving budget or method, everyone’s holidays will be less financially draining. Although it may seem awkward to bring up the subject, ask relatives to agree to stay within a set budget. This can make the entire gift giving adventure more fun and easier to live with in January, when the bills usually start showing up.

Pick a Name:

If your whole family agrees, you can each choose a name, with each person responsible for buying a gift for only one other person. If you set a maximum dollar amount, it will keep costs down even more and ensure the gift exchange is fair for everyone. Capping the gift cost at $15 to $20 per gift is a good rule of thumb. This method of gift exchange is especially frugal when very large families get together. Everyone will still take home a gift but costs will be contained. Gift cards are often a welcome present if you are not sure what to purchase.

Just for the Kids:

Another sure way to decrease costs is to buy gifts only for the children. How many times have you received a gift from a distant relative that wasn’t exactly something you would use? Save your relatives some time, trouble (what in the world should I get for my second cousin who I haven’t seen in five years?), and money and agree to only purchase presents for the little ones.

Made with Love:

Handmade gifts are a thoughtful and frugal way to give during the holidays. If all the adults agree to a homemade gift exchange, you will all save more money and you will be able to enjoy the talents of your friends and family. Don’t worry – you don’t need to be named Martha and have your own TV show to give great homemade gifts. Food gifts are always welcome including baked goods, homemade mixes for various foods, chocolate dipped fruit or pretzels, and fruit baskets. If you are crafty consider knitted scarves, themed scrapbooks, ornaments, coupon books and homemade cookbooks.

Discount Dining Deals

: One of the best kept secrets when it comes to dining out is You can purchase $25 gift certificates to restaurants all over the country for only $10. When you are ready to order a gift certificate, first go to and select “” from the pull-down menu on the left. There is a good chance you will find a coupon code for 40% – 60% off the already low certificate prices. Enter that code in the coupon section during checkout at It is not unusual to spend $5 for $25 gift certificates when you use a coupon code! You print the gift certificate from your printer and give it to the recipients when you are ready. There is no waiting for the certificates to arrive in the mail. Make sure you read the fine print as some restaurants have requirements such as a minimum purchase in order to use the certificates.

Buy for Next Year:

Purchase clearance items from this year’s post-holiday clearance and use them next year. Many of the super stores begin marking down holiday décor the day after most holidays. You can find artificial trees, ornaments, dishware, themed tablecloths and napkins, holiday cards, gift wrap, candles, and more at savings of 75%-90% off the regular retail cost. Make sure you wait patiently for a couple weeks after the holidays for the best buys. Store the items and use them to decorate next year. For instance, buy up those 75% off colored glass ball ornaments and place them in a nice crystal bowl as a centerpiece next December. Purchase the clearance gift sets such as holiday themed plates and cookie sets or cheese, plate and knife sets. Open the package, enjoy the cookies (you would hate for them to go to waste since they won’t keep!) and keep the holiday themed ceramics to give as a gift with your own homemade cookies next year.

Give the Gift of Time:

Not sure what to get for the person who has everything? Consider volunteering your time to help them around the house. Does your aunt need help cleaning out the gutters? Has your grandmother wanted to paint the kitchen for years but can’t manage the job herself? Does your neighbor need a babysitter so she can enjoy a night out with her husband? Offer a gift certificate for a home cooked meal to a new mom or an outing to the zoo with your nephew. Volunteering your time can often be the best gift you can give.

Go Treasure Hunting:

Hit the yard and garage sales for holiday decorations. Great décor can be purchased at yard sales for a fraction of the retail cost. Often you can find brand new items with the tags still on.

Go Natural:

Use natural items like pinecones from your yard or a large bowl of fruit for decoration. Placed in a large glass bowl, they make a lovely centerpiece. Use evergreen branches and pinecones on the mantel to invoke the winter theme.

Take Baby Steps:

If you are in a new home or just starting out on your own, don’t feel like you have to decorate every corner of the house in one season. Collect a few decorative items each year and add to your decorations after the holidays during those great clearance sales.

Creative Wrapping:

The $3 you could spend for each roll of wrapping paper that will be torn and discarded can definitely be better spent. How about making your own wrap using recycled brown grocery bags cut open and turned inside out (you don’t want the grocery store name on the outside of the package). Then let the kiddos use holiday stamps or handprints to add lots of color and cheer to the paper before you wrap the gifts. Finish off with some inexpensive twine and a sprig of evergreen from the yard for a real holiday look. Martha would be proud! For a colorful and frugal wrap option, use the comics section from the Sunday paper. Top it off with a colorful bow and you are all set. A number of packages wrapped similarly make a nice presentation, even when the wrap has cartoons on them! Remember that you can buy holiday wrap at 75% – 90% off during January clearance.

Recycle that Bag:

Gift bags often survive the frenzy of the holidays much better than wrapping paper. If you received any gifts in gift bags, save the bags for next year and cut down on wrap expenses. The same goes for bows, as well. Save the ones that look good and use them next year. If you receive solid color gift bags, you can use them throughout the year for most gift giving occasions. As you prepare for the holidays, remember your reasons for celebrating, getting deep in debt is probably not one of them. If you focus on giving reasonably and enjoying family and friends, you will have a much more comfortable New Year. Your family will thank you and so will your wallet! Check out our Couponaholics and Frugality forums!

Faye Prosser (5 Posts)

Copyright Faye Prosser, 2006 Faye Prosser is the author of The Smart Spending Guide. Her mission is to help others become effective advocates for themselves and their hard-earned money. She teaches people how to budget, reduce debt, and save tremendous amounts of money on groceries and everyday purchases.With the Smart Spending Grocery System, Faye's family saves well over 50% off their weekly grocery bills and they are on track to pay off their mortgage before their children even start high school! Faye, her husband and their two children live in beautiful North Carolina.

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Cindy Rowe (7 Posts)

Cindy Rowe is the owner/editor of Crazylou Creations blog. On the blog, you will find a little bit of crazy, and a whole lot of fun! As a FT working mother, she still finds time to create crafts, play around in the kitchen, plan parties and exercise. You'll find all of this and more on her blog!

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