Fact is, we usually come out on the other side of Christmas worse off financially, and if you’ve got student debt, you don’t need any extra money woes weighing you down. It’s far too tempting to whip out the plastic and charge your way through the holidays with the mindset that you’ll deal with the debt in the New Year. But what if you don’t splurge on Christmas this year so you go into 2014 financially stronger? Here are four ways to be smarter about your cash this Christmas:
#1 Decide How Much You’ll Spend Before You Shop
Many of us wait until the last days, hours and minutes to shop, and just as it is when you grocery shop hungry, you may go a bit mad in your frenzy to have done with your gift list. But eleventh hour spending madness can leave you with a debt hangover once the bills come due. Instead, set yourself a limit overall and then assign a dollar value to each person on your list. If you can’t afford everyone on your list, you’ll need to pare the list or cut back on how much you spend on each. See our blog on cheap gifts!
#2 Consult Your BF, GF or Spouse on Joint Spending Limits
If you live together and share expenses, it only makes sense that you should set spending limits together. Many couples accumulate debt without discussing it and this can lead to unpleasant surprises down the road. Some people have credit cards they hide from their significant other, secret bank accounts and all sorts of financial shenanigans that can cause problems. Discuss your Christmas budget together and make joint decisions about how much you can reasonably afford to spend together.
#3 Avoid Credit Spending
It’s tempting to swipe your card and resolve to worry about how much you’re spending later, but this is the worst idea (see #1 above). If at all possible, spend cash and only as much as you can afford without getting in over your head. Cash spending keeps you on track. If you overdo it on gifts, you may find yourself in a cash crunch in January and not be able to make your student loan payment or meet other important financial obligations. Credit card debt can haunt you into next holiday season.
#4 Think Outside the Gift Box
You don’t have to buy a gift for it to be meaningful. Consider baking cookies or making coupon books for personal services like foot rubs, help with laundry or rides to the airport. If you can sew or knit, whip up a scarf or a crafty homemade purse. You can put any skill you have to work in lieu of a trinket you need to stick a bow on. And if your loved ones know you’re dealing with student debt, they likely won’t begrudge you offering up something handmade rather than store bought.
For those with student loans, finances are a balancing act. To help keep yourself in check and on the right track, sign up for Tuition.io’s free student loan tool to manage and optimize your debt. And be sure to read our blog and check out our Student Loan Help Center for info and strategies on paying your student loans.