Friday, December 25, 2015

Don’t let Christmas linger in the form of holiday debt – Effective ways of going frugal

Every year after the holidays are over, we get back to work. Apart from the wonderful memories of Christmas and New Year, most of us carry forward the burden of holiday debt which we incurred while being extravagant during the holiday season. Majority of the Americans continue with their Christmas debts till their next Christmas and sometimes even longer. Impulsive shopping and over-dependence on credit are the two main reasons of soaring holiday debt soon after the completion of December. As per reports, it has been seen that more than half of the entire millennial generation have reported adding debt during their holidays, especially during Christmas.

Holiday debt adds $986 on an average – Is there a respite?

In between hosting parties, arranging gifts, preparing for family and fewer work hours, it is pretty easy to rack up debt and more so when you don’t have savings in your pocket. Although the $986 which has been surveyed and which added to their average debt is an amount which is pretty manageable, it can be easily repayed through the snowball method. With an interest rate of 15% on a credit card which makes the minimum $25 payment, it would take you around 10 long years to repay, thereby increasing the cost of your holidays. 54% of the debt holders say that they are more stressed about their soaring debt. 

frugal christmas

The most common form of debt – Credit card debt

55% of the credit card debt holders used a credit union or bank credit card to finance their Christmas expenses while another 35% used their store cards to pay for the expenses. Such store cards usually carry interest rates of 20% or even more than that. 10% took out a specific loan, a personal unsecured loan which they got at a lower rate and some remaining 8% relied on the worst option, payday loans and car title loans. 
Less than half of all those who were surveyed thought that they could repay their holiday debt within less than 5 months and 55% thought they would take more than 5 months to repay the debt by just making the minimum payments, which could lead to more than a decade. With all these statistics, it is more than clear that a number of debtors are desperately looking for ways to go frugal this Christmas.

Spending a frugal Christmas – Few financial tips for you

If you’ve been trapped in holiday debt back sometime, you must be looking forward for all those tips that can help you spend a frugal Christmas this 2015. Below mentioned are some such financial advices from the experts. Check them out.
  • Look for some inexpensive ways of giving joy: If you have kids at home, then your ultimate goal should be to make their Christmas memorable in any way possible. You can do many small things to make them happy and also have a great time with them. How about watching your favorite Christmas movies sipping into some delicious hot cocoa or dance to the tunes of Christmas music or bake a cake at home? These are some inexpensive ways of enjoying with your family and also remaining frugal. You can also engage your kids in some secret Santa game and join them too.
  • Host a Christmas party within a budget: Hosting a Christmas party is indeed an enjoyable experience but when you have to be frugal at the same time, you have to look for ways where you can stay within your budget. With a little bit of commitment and dedication, you can follow your budget and avoid overspending. Make use of rebates and dollar stores for all those cheaper items. Borrow items instead of buying them as you need them temporarily. Don’t over decorate and get some ornamental items which you might have used last year. Reduce the decorations.
  • Drive around with family: Sitting back at home during Christmas seems to be a pretty much boring idea but when it comes to cutting down on your expenses, you need not cut down on the fun. Take your family and drive around in order to check out the Christmas lights around your locality so that you don’t feel like you’ve wasted your time totally in the pursuit of achieving a frugal life. You can even visit the shopping malls as they’re aptly decorated for Christmas and participate in the different events.
  • Make some good DIY gifts: If you are someone who loves to gift people, you can opt for creating some DIY gifts. The more you hone your creativity; the better will be the way in which you can save money during Christmas. Make cards and gifts and in case you fall short of ideas, you can always search Google for some brand new ideas.
  • Serve others in the church: We are usually blessed to attend the church and feed the homeless on the Christmas day. This means that instead of driving to the stores for picking those last-minute gifts on Christmas Eve, you can spend some quality time helping those who are working in the church. This would be a social work and you could be blessed by God for your philanthropic activities.
  • Plan your own entertainment: There are many cheap ways of entertaining yourself and your family. When you’re planning a frugal Christmas, you have to opt for those ways in which you don’t have to spend a huge amount of your dollars. You can at the most cook something at home so that you can have a good feast at home, or arrange a potluck dinner.
Therefore, if you don’t want to follow the herd of people who incur holiday debt and carry it till their next holiday, take the above mentioned steps to spend Christmas in a frugal way. Christmas should be spent in such a manner that it remains memorable; it shouldn’t remind you of the financial mistakes which you made last year.


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