Christmas in July? It Could Save You, Big Time

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Did last year’s holiday shopping bust your budget? You’re not alone. According to a Gallup poll, the average American ponied up $96 each day in December 2013.

This was discretionary spending, in addition to everyday expenses. Come January, you have to wonder how many people got hit with credit card bills they couldn’t pay.

We’re fewer than five months away from Black Friday. Let this be the year you choose a saner approach to holiday spending. Just a few basic strategies will help you spend less and enjoy more.

Your plan should begin with an honest assessment of how much you can afford to spend. Some people add up last year’s tab and add 10 percent — easy, right? Be honest: You might not actually have been able to afford it. Maybe it took months to pay off, or maybe it sidelined your efforts to build an emergency fund or save for a summer vacation.

What you can afford should translate to “what you can pay for at the time,” whether that’s cash as you go or a credit card paid in full each month. But here’s the beauty part: If you start shopping now (more on that in a minute), you won’t be a nervous wreck come late November.

In fact, you may be all done before you’ve snapped the wishbone come Thanksgiving. Personal finance expert Mary Hunt says that an early start can keep you from “buying emotionally” vs. being a relaxed summertime shopper.

“I can ponder and compare. I have time to think, design and create,” says Hunt, author of more than two dozen books, including “Debt-Proof Your Christmas.”

Changing the game

Next, take a tip from Old St. Nick: Make a list and check it twice. Specifically, rethink the number of names on that list. This might be the year to change the game.

Suppose your huge extended family gets together for Christmas, and buying presents for all those shirttail cousins is breaking your budget. Propose a few different ways of giving, such as:

  • Age limits. Only those younger than 18 or older than 80 get presents.
  • Draw names. That way each person has to buy only one gift.
  • Serious or funny? In regard to that one gift, give each recipient the chance to opt for an ordinary gift or something unusual/funny/odd. (We did this at a former workplace, and it was lots of fun.)
  • Giving to others. Let people opt out of gifts with the request the money be donated to a local or national charity.

Don’t be surprised if there’s some pushback, e.g., outraged wails of “But we’ve ALLLWWWWAAAAYYYYS done it this way!” or “What are you, some kind of Scrooge?!?” Stay calm and repeat gently (but firmly) that this is how you need to do it in order to stay within your family’s budget.

And remember: Other relatives might be secretly relieved that you brought this up.

Next, look at the list of folks for whom you’ll be buying. Since you’re starting early, you have time to put some thought into each gift vs. grabbing whatever you can find Dec. 23. Think about each person’s wants and needs. Maybe your single-parent sister could use a massage gift certificate. Perhaps your dad’s interest in family history could be helped along with a membership to, which you can buy through a cash-back shopping site.

Be wary of fads. The 12-year-old who’s currently nuts about paranormal teen romance novels might be reading a completely different genre by December. A preschooler who loves Hello Kitty could suddenly switch allegiances to Disney Princesses.

Another important tip about buying for children: Be sure to ask their parents what isn’t permitted. No matter how hard your nephew begs for a cap pistol, you need to make sure such a purchase is on the list.

Using the list

This means you, grandparents: Do not undermine the parents’ wishes by deliberately purchasing unwelcome items. I know a mom and dad who specifically requested “no electronic gifts” for their toddler, but one set of in-laws gave an iPad anyway. The purchase was a waste, because the parents won’t let the child use it.

Incidentally, you’re also within your rights to avoid branded items like the ones mentioned above. Other than the do-not-buy list, the suggestions family members offer are just that: suggestions.

Keep your gift list with you, either in virtual or paper form. You’ll be using it in several ways:

  • Clearance tables. These are a particularly good bet right after Christmas, but summertime sales can turn up some swell gifts, too. Note: Online merchants have virtual clearance racks, and sometimes the savings are startling.
  • Thrift shops. One of my relatives is nuts for puzzles. At a thrift store on half-price day I found an unopened jigsaw that reproduced a section of the Sistine Chapel and paid just 35 cents. Books are often an especially good buy at these places, with bestsellers and beautiful art or coffee-table tomes available for pennies on the dollar.
  • Yard sales. It’s hit-or-miss, but you can sometimes find lovely items still in the shrink-wrap, or clothing with the price tags affixed. Some of the gifts I’ve scored this way: candles, journals, picture frames, art cards, books, scarves and baby clothes.
  • Social buying. Sites like Groupon and LivingSocial offer vouchers for dinners out, massage, art classes, stand-up paddle board lessons and countless other interesting potential gifts. (Bonus: An experience does not end up as clutter.)
  • Daily deals. The inventory changes constantly, so you’re pretty much guaranteed a match for everyone on your list.

Each time you purchase a gift, you get to cross off a name. Doesn’t that feel fine?

Keeping the holidays affordable

Back when the Earth was still cooling, my mom had a Christmas Club. The workplace credit union took a certain amount from her paycheck each week so that she and my dad could pay cash for all of those bikes. Why not set one of these up for yourself?

“Open a new savings account, nickname it ‘Christmas Club’ and set up a monthly automatic transfer to it,” suggests Hank Coleman in this post on the Daily Finance blog.

A few more tips to reduce the cost of your holiday:

Regift. Look through your belongings for like-new or unused items you can put under the tree. Just be sure you’re not giving something back to the person who gave it to you in the first place.

Let somebody else pay. That is, get a rewards credit card and/or join rewards programs like MyPoints and Swagbucks so that you can cash in points for gift cards to help with your shopping. I paid for almost all of my 2013 Christmas shopping with help from several rewards programs and a couple of rewards credit cards. If you start now, you’ll have plenty of points by the time Black Friday rolls around. Remember, though, that a rewards credit card is not a license to overspend. Don’t buy more than you can pay off each month.

Enter contests. Put your name into the hat for drawings at local businesses (or your favorite blogs), or get into the habit of entering at least one online sweepstakes each day. I’ve obtained quite a few items this way: a Radio Flyer wagon, an iPod Shuffle, movies, a basket of Starbucks items and a ton of stuffed animals. It’s a long shot, to be sure, but you can’t win if you don’t enter.

When you’re finished, stop. Seriously. Don’t second-guess your purchases once the holiday ads start popping up. Remind yourself that your list was a good one and that, more to the point, it’s a completed one. If you’re all done shopping by October, then stay out of the stores after that. Except, of course, for the post-holiday sales – that’s when you’ll start buying for Christmas 2015. Ho, ho, ho.

Readers: Got any other tactics for getting a head start on the holidays? Leave them in the comments below or on our Facebook page.

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