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Collectively, we’re still not averse to credit card debt, it seems — especially when the holidays are involved.
The gift of debt
According to a recent CreditCards.com survey, 61% of people already carrying debt are willing to sink deeper into the red for the holidays. And 30% of people not in debt who are willing to get into debt for the festive season. (Yes, 30% is a lot less than 61%, but it’s still 30% higher than I’d like to see.)
And that’s not the end of the troubling news. Counterintuitively, those who owe are more likely to be complacent about holiday debt. Fifty one percent thought that the holidays were an okay reason to go deeper into debt versus just 26% of people who didn’t owe anything on their cards.
I suppose this makes sense to an extent. Being in debt can numb you or at least dull the impact of more debt. “I’m already in the red, so what’s a little more?” is an easy attitude to get into if you’re not truly laser-focused on credit card payoff.
What’s the alternative?
Of course, many folks may feel that they have no choice. Sixty five percent of parents with kids under 18 said they’d go deeper into debt for the holidays (though at least a whopping 9% of them felt it wasn’t necessarily okay to do so).
But on the other hand, what are you going to do? Tell the kids that there’s no holiday gifts this year at all? Sure, it’s doable. But most of us wouldn’t have the heart to take away a kid’s Christmas altogether.
Of course, you could also do something crazy like stay within a circumscribed budget on gifts to avoid further debt. All well and good in theory, but some people are stretched so thin that any gift might have to go on the card.
And if you’re middle class, you can’t really (in good conscience) sign up for Toys for Tots or Angel Tree.
So what can you do?
Well, first of all you can set aside the money out of your paycheck — assuming that’s something you can afford to do.
After all, if you get paid biweekly then there’s still at least one paycheck coming to you before Black Friday and at least three before the winter holidays commence. Even $50 out of each paycheck could buy some good toys for the kiddos.
You may just have to limit it to a one-toy Christmas, as hard as I’m sure that would be. As for you and your partner, maybe go without gifts this year if money’s really that tight.
And if you’re an adult with no dependents, just make it known that you need to skip presents this year. If you’re not comfortable with that, suggest a Secret Santa-style giving this year for your whole family. That way, you only have to buy one gift.
It may be a little embarrassing, but I’m sure your loved ones don’t want to see you sink into debt (or deeper into debt) just so they can get a present. If they do, then they don’t deserve a gift anyway.
Another option is to join your local Buy Nothing group. Similar to Freecycle, this group will have members post things that they no longer want in the hopes of keeping it out of the landfill.
Some pretty nice stuff gets offered on there. My mom and cousin have gotten food, several pieces of home décor and even a mini-fridge, among other things. The items they often end up being given as gifts, and apparently the recipients always love their presents.
So this is a great source for free gifts that won’t look free. Just be sure to watch the group like a hawk so you can pounce on the good stuff.
And if you just can’t resist giving?
Then it’s time to look at the budget and see where you can trim.
Maybe there are some frugal hacks that you keep meaning to get around to but never do, like cutting cable or calling to get your Internet bill lowered. Now’s the time to do it!
Rewards programs are another avenue to make giving more affordable. If you’re diligent, you could definitely get $50 (or more) worth of gift cards from Swagbucks before the holidays hit. That’d buy at least a couple of smaller gifts for the kids.
Take surveys, watch some videos (or, really, just the ad portions of the videos), participate in weekday trivia — all of these are easy ways to earn gift cards to places like Amazon, GameStop, Walmart and all sorts of other places with the toys kids want this season. So if you’re not already a member, join Swagbucks today!
Then there’s the perennial advice of paring down on eating out and, yes, skipping pumpkin spice latte season if either one is a too-regular treat that you indulge in.
Of course, perhaps takeout and coffee bring you joy. Well, then you have to make the hard choice between which brings you more joy: giving gifts or taking in some PSL-laden caffeine. To be clear, either option can be correct, but you do have to make the choice.
However you do it…
No mater how you go about it, please please please find room in the budget (instead of your card’s limit) to give any gifts this year.
And as soon as this season is over, consider creating a sinking fund to save up for next year. Even just $10 a paycheck starting in January would mean more than $200 in the bank by next December for most people.
All that being said
I know that I once again speak from a position of privilege. I make enough and have enough in savings that I wouldn’t have to go into debt, even if I had a lot of people to shop for. (And I don’t; it’s just Mom.*)
So I’m not judging the people who go into debt (or go further into debt) for the holiday. I understand wanting to treat loved ones. I truly do.
But while I’m not judging the people doing the buying, the survey results do worry me. Our overall financial health needs to be better when a recession inevitably hits. And being in debt, let alone getting further into it, is obviously the opposite of financial health.
Not to mention that credit card interest rates mean you could be spending significantly more for those gifts than just their price tag. By the time you finally pay off the balance, you could be paying more than double the original cost. That’s not good for anyone’s budget!
So do yourself (and future you) a favor and keep the holidays as affordable as you can reasonably manage, especially if you’re already in debt.
Would you go into debt (or deeper in debt) for the holidays? How do you keep the winter holidays affordable?
*Darryl and I agreed not to give each other gifts, as I’m impossible to shop for — I don’t want much, and what I do want, I get myself — and he’s just not really all that into Christmas. So no gift isn’t a big deal to him either.