How to Survive the Holidays Without Going Broke (or Insane!)

Demanding in-laws, children, spouses and siblings. Any or all of these can cause you to pull your hair out during the holiday season.

Add this to the financial pressures exerted on your wallet at this time of year and you have a recipe for potential disaster.

With not enough time for everyone and everything, it can be tempting to try and spend your way out of trouble, leaving you with a post-holiday nightmare when the credit card bills arrive.

It doesn’t have to be this way.

With a dash of understanding, a pinch of preparation and a heaping spoonful of holiday cheer, you can get through the season emotionally and financially intact. You might even enjoy yourself for a change!

Sit back with a cup of eggnog and let GetOutOfDebt.org’s holiday guide light the way to your brightest year ever.

People Like Us

The holiday season can be a time of conflict for couples and a logistical nightmare for families.

Consider what a typical couple experienced last holiday season:

After a fitful three hours of sleep, Mike and Carol B. were awakened at 6 a.m. Christmas morning by the sound of fighting children.

It had been a particularly stressful time for the B’s. Married that May, this was the first year they had spent together as a family and it had been filled with numerous arguments over how much they should spend on the six children from their previous marriages, whose relatives they should spend the day with, and what church to go to for the holiday service.

The kids had done their part by continually dropping not-too-subtle hints about which expensive and impossible-to-find toys they were hoping to get.

Instead of celebration, the entire season was filled with tension and headaches for both Mike and Carol and they found their already strained budget stretched to its limit by all the demands being put upon them.

Sound familiar?

Let’s see what can be done to make sure you, Mike, Carol and their bunch don’t have to go through another year like that.

A Guide to Giving

The most common trap people fall into is over giving. Countless families and individuals spend themselves into a debt from which they cannot dig themselves out.

What is over giving and how does it differ from plain old generosity?

The definition varies, but in general it can be thought of in two ways.

The first definition involves giving something that is out of proportion to your income. A divorced father making $35,000 a year giving his 6-year-old son $1,000 worth of toys for Christmas would be an example.

The second definition of over giving is when the gift is out of proportion to the celebration. An example of this would be the daughter of a millionaire whose mother buys her a new piece of diamond jewelry when she brings home a good report card. In this case, the mother may be able to afford the gift, but it is out of proportion to the reason for giving it.

People typically over give for one of four reasons:

  1. Guilt — A father who feels guilty about his absences or a mother who buys gifts to “make up” with her daughter after emotional outbursts.
  2. Competitiveness — Someone from a lower income bracket competing with the expensive gifts her parents and siblings give her.
  3. Living out our fantasies through our children — An example may be a parent who dreamed of being an astronaut as a child sending his/her daughter to space camp, when the child would much prefer to spend a day with the parent at an amusement park.
  4. Compensating for some hurt we experienced as children —A parent who comes from an impoverished background may overspend in an effort to ensure that his/her children never feel the pain he/she did as a child.

Over giving may make both the giver and the receiver feel good in the short-term, but is a dead-end in the long run. The giver often feels let down or resentful shortly after the holiday, and children who are overindulged often grow up with unrealistic expectations.

It can be helpful (not to mention economical) to think of the holidays as a season, rather than as a build up to a special day, culminating in the opening of gifts. Like any other major event, it is often helpful to sit down well in advance and develop a plan of action.

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For families, this starts with an agreement on what type of holiday experience you want your children to have. Agreeing on how the holidays should be celebrated is not always easy, as partners often have had different experiences growing up, which can lead to very different expectations of how to celebrate the season as an adult.

Before deciding how to celebrate the holidays this year, take some time to discuss what the holidays were like for each of you as children.

  • How many gifts were the norm?
  • Was there pressure on family members to compete for the best gift?
  • Was there travel to relatives or were the holidays spent at home?
  • What was your best holiday memory?
  • What was your worst?

This conversation can be fun and enlightening. It will deepen your relationship with your partner and can help you to understand why certain traditions are so important to each other.

Whether married, separated or divorced you will find that compromise, cooperation and understanding are key to providing a happy holiday experience for yourselves and your children.

Where Do You Go for the Holidays?

Where do you go to celebrate the holidays? This source of many an argument is really very simple to resolve. If there is a conflict, then the only fair way is to alternate each year.

Count the Cost

It is important to include a holiday budget in your discussion. Look very carefully at your regular spending to see what you can reasonably afford.

The best way to prepare for the added expenses of the season is to work out how much it cost you last year, then to put away one-twelfth of that amount each month, starting in January. That way you won’t have to go into hock just to have a good time.

If you must use a credit card to purchase gifts, make sure that you will be able to pay the bills off in full within one to three months at most, so you are not still paying for this holiday when the next one rolls around. The stress of constant indebtedness can add to holiday misery.

Even if you have unlimited resources, it is important to think about how much you want to give your kids, as it can serve as a model for them on how they will acquire things later in life.

This is not to say you shouldn’t go a little overboard; holiday times are special and indulging a child’s wishes more than usual is fine. The trick is to avoid going too far.

Family Time

After you have had your planning discussion as a couple (or developed a plan as a single parent), have a second conversation including the kids. Ask them what they would like to do to celebrate, not only on one day, but during the season as a whole.

Find simple, inexpensive things to do together such as baking cookies one night, making greetings cards together, taking a drive together to see the holiday lights, or watching a favorite program together.

The important thing is that you do things together as a family. Develop a calendar of activities and put it up somewhere where the whole family can see it and look forward to it.

Volunteering with your kids at a shelter, hospital or other place of need will encourage altruism and show your children how less fortunate people spend their holidays, but be sure to run it by them first to get their input. You, as parent, make the final decisions, but giving the kids a voice will head off a lot of problems.

Planning together helps you and your children to de-emphasize the importance of material gifts and to view the holidays as a season of goodwill.

Wants and Needs

One of the most difficult issues for parents is what to do when you simply cannot afford the gift your child wants. Kids will do their part in making this difficult by playing on your guilt — the little angels!

While children’s behavior can be downright manipulative at times, understand that learning how to get what you want is an important developmental skill and that when kids are bugging you for the latest must-have toy, they are simply testing out different ways of getting what they want. (To fully appreciate what your child is experiencing, it might be helpful to remember the feeling you had when you first saw that shiny new car in the showroom.)

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You may feel less pressure during the holidays if you can view the season as an opportunity to teach your children about prioritization of needs and delaying of gratification, rather than reacting out of guilt, anger or frustration when they begin to nag you about buying them this, that and the other thing.

It’s OK, even healthy, for children to experience some disappointment. It helps them develop an appreciation of the value of a gift and the importance for everyone, including their parents, to live within their means.

A relatively painless way to teach kids this important lesson is to keep a “wish list” on hand for each child all year round. When the child sees something he or she wants, you sit down together and add it to the wish list. When the holiday season rolls around (birthdays, too) and you have your budget in mind, sit down with your children and go over what they want. Depending on your budget and their wants, work with them to prioritize the gifts according to cost and/or number of gifts. Chances are they may try to talk you into getting more than you want to give them. Remember, this is natural, so try not to get mad; the lesson you are trying to teach them is to differentiate want from need.

When going over the wish list with your kids, try to keep their age and level of understanding in mind. Kids under the age of 4 are very likely too young to use the wish list. A child under 7 is not very likely to understand the relationship between a budget and gifts.

Try to explain your limitations in a way they can understand, perhaps telling them that Santa’s sleigh will hold only so many toys, for example. For older kids and teens it may be appropriate to limit them to a certain dollar amount or a certain number of gifts.

Regardless of the age of your child, it is often a good idea to surprise them with a gift or two that you hadn’t said you would get them. After all, part of the fun of a holiday is in the surprise and too much emphasis on the wish list may cause the holidays to represent nothing more than a time for negotiation in kids’ minds.

It is also important to take the age of your child into consideration when deciding the type of gifts to get them. Many parents share the story of buying their 2-year-old an extravagant gift only to find that the toddler was more interested in the wrapping paper and the box than the gift itself.

Another useful tool is to remember how your children reacted to the holidays in years past. Did they play with one toy? Did they seem overly excited by the number of presents? Did they appear over stimulated by a particular type of toy? Your previous holiday experiences with your kids will be one of your best barometers in planning for enjoyable holidays in the future.

Whatever strategy you decide to use in buying gifts for the holidays, the important thing is to keep it reasonable and within your budget.

Planning the holidays, from where to spend them, to the budget, to what types of gifts to give, to which activities you share takes work. However, it can be time well spent resulting in a holiday season that leaves you feeling both sane and solvent. More importantly, it won’t leave you with memories which make you shudder, but ones you and your family will cherish for years to come.

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