Budgeting for Christmas in a Tough Economy

When the economy is struggling and people are out of work, it can be stressful to think about upcoming expenses. This includes the holiday season, where plenty of consumers feel obligated to purchase gifts for a variety of friends and family even if they are short of funds. While protestors continue to occupy Wall Street, consumers are faced with the expectations of the season. How do people make ends meet when there is so much financial uncertainty? Can the household budget survive another Christmas?

Agreeing to not exchange

One practical strategy for saving money during the holidays is to skip gift exchanges altogether. This may be easiest in an office setting or between adult family members. What is ironic is that gift cards are becoming more common in today’s society, which means that sometimes people end up exchanging gift cards of similar value. Rather than spending money on an item and then getting a similar item in return, it might be best to skip the practice altogether. Perhaps children can be spared this practice of cutting out gifts, but adults can certainly go without more merchandise.

Skipping other costs

Affording the expenses of the season such as gifts may be about cutting other costs. This is where consumers have to sacrifice and get creative. Perhaps a family could eat out less during the holidays, or skip some regular social events. Consumers may want to drive less to save gas and stay home rather than attending too many holiday parties. What people have to realize is that too often costs add up during the season because people are in a good mood and want to enjoy themselves. However, this may be the best time live a little more frugal and find contentment in what is already available in terms of entertainment and household resources.

Avoiding the cards

Back away from the credit card. Too often, the holiday budget is supplemented by credit cards, which many consumers hope will magically get paid off somehow in January. Loading up the credit cards can be a very poor financial decision in a tough economy, particularly with high interest rates and decreased income. Therefore, adults have to be responsible and realize that family disappointment may be less stressful than the ongoing obligations of consumer debt. If people aren’t sure they can discipline themselves, it might be best to actually remove the credit cards from the wallet and lock them in a drawer for a couple of months.

Making real cuts

Businesses want consumers to stimulate the economy by spending during the holidays, but the reality is that sometimes money simply cannot be found. Budgeting, cutting coupons and monitoring spending are all good strategies, but there times when money management will only go so far. In order to afford the expenses of the holiday some people may need to make real cuts. This may be an adjustment, but it is also an opportunity for people to step back and take stock of their life. Do people really need more stuff? Perhaps a lack of disposable income can be an opportunity to appreciate those things in life that are really important.



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