Dear Deborah,

I have a dilemma. My family is expecting me to spend a lot for their Christmas presents.  Although I’d like to do that, our current money situation is tight. Just so you know, in the past we’ve pretty much bought what we wanted on credit. How can we celebrate Christmas and still have holiday harmony? – Catherine

First of all, let’s not forget the true meaning of Christmas. It’s not about the shopping malls (or the shopping mauls the day after Thanksgiving). It’s not about getting caught up in the rush of buying more things. It’s more than gifts and glitter.

Let’s keep Christ in Christmas, remembering God’s gift of His Son extended to all humanity.

As we celebrate the true reason for the season, let’s make this a season of reason. Let’s be fiscally reasonable. We can purchase gifts that fit within the family budget. 

Resolve to pay cash for gifts. Why should we stress and worry about our credit card bills after the holiday season? Do we really want to be saddled with debt that extends into the New Year and beyond? The “borrow now, pay later” philosophy is costly.

The average purchases on credit cards end up costing more than twice as much when they aren’t paid off right away, according to Bankrate.com. Families are discovering that  revolving debt with growing interest is not a great solution. Let’s resolve to spend some of today’s money and not tomorrow’s money on gifts. 

A writer friend says that you know you’ve spent too much on Christmas presents when you use cardboard boxes, wrapping paper and computer manuals to heat your home.

Decide what funds are available for gifts. Write down that dollar amount as a spending limit. Stick to it.

Set realistic expectations with the family. Adjust the family’s expectations now, taking some time to talk with them. Explain the change in your spending plans this year. You’ve recently looked at your budget and you’ve decided what is best for the family. 

Make a gift-giving list. Spend to meet the recipients’ needs and wants. When on a limited budget, consider giving children the one thing they really want, instead of many gifts. If necessary, pool funds for that more expensive item. Think of gifts that are useful long-term as well as in the moment. 

Recipients usually think more about whether the gift is thoughtful than its price. A recent study entitled “Money Can’t Buy Love” tends to support this. The paper says that there’s not a substantial link between how much the recipient appreciates the gift and its cost (Journal of Experimental Psychology). 

When you’re finished wrapping the gifts, relax. You’ve been resourceful and stayed in control of your holiday spending. Enjoy the celebrations of the season with your family.

Copyright 2012 Deborah Nayrocker. All rights reserved. Permission to reprint required.

Deborah Nayrocker writes on personal money management topics, showing others how to take control of their financial future. An award-winning writer and columnist, she is the author of The Art of Debt-Free Living and Living a Balanced Financial Life. Her Web site is www.ArtofDebt-FreeLiving.com.

Publication date: December 14, 2012

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