Save BIG on Black Friday.

Then do it again online on Cyber Monday.

Once again, it’s that crazy time of year when consumers get sucked into buying things that they don’t need (but think they do), and then rationalizing the purchases as great money saving opportunities. The advertising and promotion is heavy this year and the temptation is strong to “shop ’til you drop.” Even I find myself going to bed with promotional catalogs, looking at all the cool stuff that could be mine…

But then I remember that I have a choice. I don’t have to fall into excessive consumerism and unwanted debt. I look around my house and see plenty of cool stuff, some of it from last year that hasn’t been touched or played with, ever. My closet is full of clothes that I love to wear. But wouldn’t it be nice to have another…(you fill in the blank here).  And what about gifts for the family?  I don’t want to miss out on all the amazing savings available right after Thanksgiving (or before…?)

Beware of false savings

REMEMBER

“Pay yourself first rather than the merchant who claims to ‘save you money.’ The only way to save money is to put it back in your accounts and invest it for your future.” – Jamie Rice

It’s good to hang out with money smart people. This week I had the privilege of having a coffee chat with Jamie Rice, chief investment officer at JQR Capital. Jamie and I have gotten to know each other at various networking and community events.  Jamie is a good listener, an engaging speaker, and most importantly, a judgement-free financial adviser. Jamie takes the time to educate his friends and clients on how to make your money work for you.

When the topic came up about the holiday shopping craze, Jamie came up with the line, “Look how much money I saved.”  With his permission, I borrowed his idea to write this blog. And it got me thinking more deeply about how I was going to get through the holidays without the usual debt hangover in January.

Strategies to stay financially safe and sane this holiday

1. Set a fixed budget for the amount of money you plan to spend on food, gifts, and entertainment this holiday. Stick to it. Withdraw cash from your bank account and put it into three separate envelops (Food envelope, Gift envelope, Entertainment envelope). When the envelopes are empty, your shopping is done. Note that this means you are paying cash for everything.
2. Pay cash for everything this season. Avoid using your credit cards when you shop for gifts. Don’t fool yourself that you’ll be earning points, cash back, or trips. You’ll only be creating a problem for yourself in January, and it might run to Feb, or March, or….. If you want to purchase things on line, use a pre-paid gift card. Paying with cash makes you pay more attention to how much you are really spending.
3. One gift per person. Don’t go crazy buying multiple gifts for each person. More is not always better. In fact, it usually overwhelms the gift recipient. Set the limit for one gift (and that includes all the money you’ll spend on stocking stuffers.) Also remember that when you give gifts, it could put pressure on people to reciprocate – just adding more pressure to buy, buy, buy.
4. Leverage your credit card reward points to get gifts. Cash in on your reward points and order gifts and gift cards. Do this early as sometimes it takes credit card fulfillment companies weeks to fulfill the orders. I have found that my teenage nieces and nephews really do prefer gift cards over the physical gifts that I have selected for them in the process. They also love to receive cash, more than things – giving them the ultimate selection on what they get for the holidays.
5. Immediately dispose of the gift catalogs. Recycle the direct mail offers, and delete the merchant promo emails and text messages that you receive. Do not even open them up or browse at their offers. In the bin it goes. The less you see, the less tempted you will be to impulse buy.
6. Stay out of the stores. The best way that I know to save money is not to go shopping. Just don’t go. Don’t put yourself in the path of temptation. Go for a hike, take a bath, bake something, read a good book (at the library?), go window shopping (but stay outside, don’t enter the building!)
7. Get creative. Bake something. Build something. Create a unique “experience” rather than a physical gift. This year my husband and I will be celebrating with the theme of “Christmas Past.” Rather than buying new stuff, we will be re-wrapping holiday gifts that we gave each other last year, and the year before that. Some of these gifts from Christmas Past are still sitting unopened, unused, and unloved. We’ll visit the “Island of misfit toys” in the basement of our home. We’ll re-discover cool stuff that deserves to be wrapped, unwrapped, and celebrated, just like this scene from the 1964 classic movie: Rudolph the Red-Nose Reindeer.

Now some of you may feel that I’m being a kill joy, a hypocrite, or downright unAmerican. But the truth is that so many of us live beyond our means, have more stuff than we need or want, and are failing to save enough money for our futures. We succumb to the marketing messages of Buy Now – Get More – Save Money – Shop ’til you Drop. 

It’s your money. You worked hard for it. You get to decide who gets it. How about keeping a little for yourself, and for your future. Why not spend your energy and resources this holiday season creating new memories, not accumulating debt and a houseful of stuff. Come January when your credit card statements are delivered, you’ll be glad you read this blog and implemented some of these cost-saving, holiday-joy-making strategies.