An estimated 115 million people planned to snatch up bargains (real or imagined) on the day after Thanksgiving, according to the National Retail Federation. But that wasn’t the extent of the holiday buying. The NRF’s indicated that:
- 32 million planned to shop on Thanksgiving Day.
- 71 million would shop on Saturday (76% of whom said they would do so to support Small Business Saturday).
- 35 million planned to shop on Sunday.
- And 78 million would shop on Cyber Monday.
The Mad Men (and Mad Women) of Madison Avenue are very, very good at what they do. They know we want to make the holidays memorable for children, grandchildren, nieces and nephews, and significant others.
As a result, consumers may find themselves going into debt, or at least overbuying, to satisfy someone else’s idea of the perfect holiday.
And if that’s you? If despite your best intentions you went a little (or a lot) overboard with the spending?
Stop panicking and start fixing. The following tips will help you forestall debt or at least deal with it quickly rather than pay a ton of interest.
Fix No. 1: Return some (or all) of what you bought.
Obvious, right? Even if you have to pay a re-stock fee for an item, it sure beats wondering how you’re going to pay for the whole thing. Chalk up any fees to the Impetuous Tax and vow to do better next year.
This tactic works particularly well for people with children, since extended family members will likely provide gifts. So let Junior have one or two nice things from you, and fill in with the presents from grandparents and doting aunts and uncles.
(Pro tip: Consider observing the “four gift rule” — something you want, something you need, something to wear, something to read. Our children’s expectations should be shaped by us — their parents — rather than TV commercials.)
Suppose you went rogue with things like small appliances, accessories, tools, or electronics? Now is a good time to have The Talk with your significant other. (A better time would have been last year, but too late now.) During this chat, emphasize how much you want the holiday to be special, but that you blew it and overspent.
Suggest that the two of you set a reasonable spending limit in order to keep household finances on an even keel. Solvency is one terrific gift, especially when it’s given year after year. Then decide what to return, and have fun giving what’s left.
Note: Some deals truly can’t be beat. For example, personal finance blogger combined rebates, a store loyalty card, and a discount code with Black Friday sales prices and paid only 52 cents each for a slow cooker, coffeemaker, griddle, and waffle-maker.
If you got a deal that good, you should probably keep the items, because your coffeemaker (or whatever) will wear out eventually, or you could make some money selling them on a Facebook yard-sale page or on Craigslist.
And if you plan to keep it all, no matter what, then move on to the next tactic…
Fix No. 2: Hold some items back.
Who’s gonna know? Your kid won’t magically sense that you originally bought him eight toys even though only four of them wound up under the tree. Your partner won’t know that he was going to get an iPad and a wallet and a bathrobe and new ski goggles.
Keep back some items to create a gift closet. Extra playthings will make great birthday gifts and, more to the point, will be on hand to give when your child gets invited to birthday parties in the coming year. Bonus: You paid rock-bottom prices for both the gifts you keep and the gifts you give away (#winning).
The fleecy hat-and-glove set the store practically gave away on Black Friday could make a good Secret Santa gift at your workplace next year. If your kid brother will graduate from college in June, turn that 52-cent coffeemaker into a present for his first apartment. And so on.
However, deciding not to return any of the things you over-bought means you’re also deciding to accept a higher-than-usual credit card bill. To reduce the pain, get going on…
Fix No. 3: Make extra payments. Starting now.
But not from your emergency fund! Overspending on gifts is not a bona fide emergency.
Take a look at the budget and see how much wiggle room you’ve got. Suppose you’ve got a $150 cushion after paying the bills and allowing for the month’s gasoline and groceries. Send at least $75 to the credit card issuer right now. Got more than that? Send more than that.
Yes, before the bill arrives. The card issuer doesn’t care when you make payments. (Well, actually, it does care: These companies get rich because consumers carry balances.)
Make another payment when your next paycheck comes. Repeat the process until you’ve covered the cost of what you bought.
Understand: I’m not suggesting that you deplete your checking account, but rather that you man- or woman-up and accept the responsibility for your actions. Which brings us to the next tactic…
Fix No. 4: Get creative about the source of those extra payments.
This is a time of year when we spend more than usual. Not just on gifts, either, but on things like special foods, decorations, greeting cards, and non-gift items we buy for ourselves (e.g., that new television for the family room).
The challenge, then, is to find “extra” money in the budget right when you’re about to observe beloved traditions like an enormous Christmas dinner, massive holiday light displays, or the dozens of Swedish Creams and pepperkakor you bake every year.
Creativity is key. Here are a few options:
Cut back on small treats. Skip some coffees. Pack your lunch. Spend your Saturdays addressing holiday cards or playing games instead of hitting the movies. Make it a point to eat more (or all) your meals at home. If you usually hit happy hour at the end of the work week, either take a few Fridays off or sip a single beer and leave when it’s finished.
Do a “pantry challenge.” Make it your business to eat mostly or completely from the cupboards and freezer. If the only things you buy at the supermarket for the next few weeks are milk, bread, and produce, you can throw what you would have spent at the credit card bill. Bonus: You prevent food waste by clearing out some older stuff that wasn’t being eaten.
Look for a side gig. Put it out in the universe that you’re available for babysitting, dog-walking, helping hang holiday lights, or whatever it is you enjoy (or at least do well). Already got a side hustle? Push it a little harder: Take on more rideshare clients, say, or spend some evenings making more items for your Etsy store.
Ask your family for ideas. “Guys, we’re looking for ways to pay for a truly awesome holiday with cash. Who has ideas for places we can trim spending?” Your kids may have good tactics (“Do we really need holiday PJs?”) and they’ll get a sense of themselves as part of the family unit.
For more tips, here are some other ways to come up with extra cash quickly.
Festive Opportunity Cost
It really doesn’t have to be spelled “Chri$tma$” to be memorable. Considering the holiday’s humble origins, it shouldn’t be all about excess anyway.
Overspending may be due to nature (we want to make our loved ones happy) or to nurture (because you grew up with huge celebrations and think that’s the way everybody does it). Or it might just be that marketers really know how to whip us into an emotional frenzy during the last couple of months of the year.
Here’s how psychologist and author puts it:
“(Merchants) have spent million of dollars in figuring out how to manipulate you psychologically into how to spend more money. Understand that most of us are powerless against that.”
There’s nothing wrong with giving gifts. But there’s a whole lot wrong with going into debt in order to obtain them. The success of a holiday celebration is not guaranteed by the amount of money spent.
Besides, the hundreds (or thousands) you drop each year translate to some pretty festive opportunity cost. How else might that money have been able to work for you? A retirement plan, the “down payment on a home” account, a long-delayed vacation, an emergency fund?
It’s not necessary to forgo the holiday if it’s always made you happy. Just make it more about love and togetherness than about conspicuous consumption. And yeah, pay the re-stock fee if you must.
- Three Tips For Spending More Mindfully This Holiday Season
- Four Ways Holiday Shopping Can Crush Your Credit
- 10 Heartfelt Holiday Gift Ideas for People Who Don’t Need More Stuff
Veteran personal finance writer is the author of “” and “.”