-- intro: Talk about Christmas in July. Carrie Rocha has already started her holiday shopping. “A few weeks back I picked up a $60 toy for $4, and, truth be told, I picked up a whole lot more than that,” she wrote in an email. “I spent about $80 total and got $350+ in toys.”
If you think the holidays start too early as it is, you may find her approach a bit overboard. But several years ago, Rocha and her husband dug out of debt, paying off some $50,000 in consumer debt, a process she detailed in her book and website PocketYourDollars.com. One of their strategies, she says, was to “stop pretending the holidays don’t come every year.”
Whether you want to think about it or not, the fact is the holidays will be here before you know it. So unless you have plenty of money to throw around or plan to forgo festivities altogether, now is the time to start planning for a debt-free and less stressful holiday.
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"To start this in July is fabulous,” says Karen McCall, founder of the Financial Recovery Institute. “One of the things that happens to people is they leave it until the last minute, and the chance of them having the Christmas they want without going into debt decreases.”
Here are 10 tips from five experts to help you do just that:
quicklist: title: Get it together. text:
McCall suggests sitting down as a family and talking about your favorite holiday memories. (If you’re single you can do this yourself or invite a close friend or two over for the same discussion.) “Most kids won’t remember the gifts,” she says. “They will remember the experience. They can also remember what their worst holiday memories are. Then they can connect the dots.” The goal, she says, is to figure out what you can take from those experiences to create the holiday you really want. “When I did this with my kids I discovered that they were unhappy that I was so busy and grumpy,” McCall says.
quicklist: title: Give your kids what they really want. text: “Give time,” suggests Megan deBoer, a certified Financial Recovery Counselor. "We all crave connection, and spending time is becoming an increasingly precious gift." But she also recognizes that the gift of time may not excite kids the way a pile of presents will, so she suggests creating a “treasure hunt of clues about what you will do together. The more excited you are, the more excited they will be.” Sam Renick, who has created a YouTube video for kids called “Sammy & Santa’s Advice,” agrees. “The best way to create memories is to spend time, not money, with friends and family,” he said. This same advice applies to friends and other family members.
quicklist: title: Make your list -- then track it. text: Write down everything you’ll need to buy for the holidays so you can plan your spending. Don’t forget things like entertaining, postage if you send greeting cards, extra groceries if you entertain, or gratuities, for example. (McCall offers a free holiday spending planner that works well for this purpose.) Then track against your plan to avoid holiday debt.
quicklist: title: Start saving now. text: Start saving money now by depositing a little bit from each paycheck into your holiday fund, recommends Trae Bodge, senior lifestyle editor for the Real Deal by Retailmenot.com. "To make it a little more fun, try a plan like my ‘BOGO Plan’ -- as in buy one, give one. Whenever you purchase something for yourself, ‘donate’ a certain percentage of that purchase to your holiday fund." She recommends 10 percent, which is easy to calculate and small enough that it shouldn’t put a big dent in the budget.
quicklist: title: Find a place to store gifts you buy early. text: “Yes, it's great to buy gifts ahead of time, but if you forget about them, then they don't do you any good,” Rocha says. “Don't stash them here and there under beds and in closets -- that is how you forget. I have a two-drawer lateral file cabinet that locks. I use that as one storage place. I also use the trunk of my car. I keep things inside bags and covered with a blanket, then tote them around there for a few months.”
quicklist: title: Buy gift packaging now. text: “You know you’ll need gift bags, gift wrap and ribbons come holiday time,” Bodge points out. “Buying those items early is a great way to take advantage of discounts. Try OrientalTrading.com (in the sale section) and the Christmas Tree Shoppes for deals.”
quicklist: title: Use coupons. text: “As you purchase holiday gifts throughout the year, make it a rule to look for a coupon prior to buying anything,” Bodge suggests, noting that RetailMeNot features coupons both on its site and in its app. She says consumers report saving an average of $20 per transaction that way. “Why not put that savings into your holiday fund?” she asks.
quicklist: title: Look for travel deals now. text: If you plan to travel during the holidays, start looking into prices for airfare and hotels now. If you plan to use miles you’ve accumulated through credit card rewards, for example, you may have to book early to get an available seat. You can also set up price alerts using a site like Kayak.com or Airfarewatchdog.com. When you see a great deal, snag it.
quicklist: title: Choose your card. text: Credit cards can be your safest bet for online purchases, because they offer better consumer protections than debit cards. But “whether you use a debit or credit card, just use one card for all your holiday purchases,” says Renick. “This will allow you to easily identify, isolate and track your giving.” Just make sure you don’t end up with a balance close to your credit limit, which affects your credit score. (You can find out how your debt is affecting your credit for free with a Credit.com account.)
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quicklist: title: Rack up rewards. text: If you have good credit, consider getting a reward card with lots of bonus points or miles that could then be used for gift cards, travel or other holiday perks. Or you may want to get a card that will entitle you to free checked bags on your airline of choice. (That’s an especially valuable perk for families where each checked bag can run $25.)
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