One skill I've been intensively working at for the past four years is saving money and reducing debts! Christmas can definitely throw a wrench in these plans.
This post is long because this is something I care about deeply. This is soooo important!
We'd been piling up debts for years and the mountain was so high, it was scary. I fell in the wondrous credit card trap. I had a collection of them.
Four years ago, my fiance and I decided it was enough. It was time to turn things around. The first thing we did was to take our scissors and cut all our cards in half! Literally.
We'd tried to get rid of these debts before, but our mindset wasn't right. I was always looking for the easy solution and was still heavily relying on my credit cards, thinking the world would end if I didn't have them... Like a safety blanket. When we cut these cards, it felt like the most dangerous and daring thing we'd ever done. Looking back at it, I realize how silly I was. It was the best thing we ever did... and the world didn't stop spinning!
My credit was so bad. There was no use asking for a loan. I tried, but without success... I surely didn't want to declare bankruptcy. I had the means to pay these debts. Looking at things more clearly, we decided not to rely on any third-party help. We signed-up for these cards, including all the little fine-prints nobody likes. People hate to admit that, but it was entirely my fault if I was in that situation. I knew about interest rates. I spent money I didn't have. I pretended like it didn't matter to have these humongous bills at the end of the month. Paying the minimum amount was fine... You would think. On one of my statements, it said that by sending the minimum payment, it would take me 225 years to clear the card... 225 years!!! This not only meant that I would never be free of that monthly payment, but beyond that, my children or other related family members would inherit that debt!!! That's ridiculous!!! All that to say that we decided to honor our signature and pay what we promised we would pay.
In order to turn things around, we had to stop spending on unnecessary things. Now, identifying what is not necessary is tougher than you'd think. You have to stop lying to yourself and admit that you don't need certain things you thought were essential. It takes practice and over time you learn to drop certain things. Beside that, you also need focus and patience. This is a rare currency these days. People have short attention span and look for the quick-fix solution. Well, you don't learn much like that. What do you really want? Are you comfortable in your current situation... Are you addicted to your problems and are scared of change? Do you really want to get out of debts, or if you don't have debts, stop spending money you could save for rainier days? These are difficult questions, but they are very important.
All of this brings me to my main point. Christmas is right around the bend and this is the moment people spend the most money. Credit cards are getting racked up to the limit, and quite often, over it. Billions of gift are bought and given... and very often, a lot of them are not appreciated or given as an obligation. Sometime, people have already so many things that receiving another gift is just adding something to the pile.
Now don't get me wrong, I love Christmas. I love decorating, I love seeing people open gifts, I love discovering great wines, I love Christmas carols and I love Christmas movies.
The Christmas spirit is what got me in trouble every year. This throws a gigantic dent in a debt reduction plan. It's so easy to pile up gigantic bills and toss everything on a credit card, thinking—That's ok, I'll deal with it later... in January.. or February... or three years later!
Now, not everyone celebrates Christmas the same way, therefore somethings here may not apply.
In my family, we are about 8 or 9 on Christmas eve, including 4 young children... and we have food for 30 people. Yes it's handy, there are leftovers for the next few days, even New Year's eve and probably Valentine's day... without counting what you'll throw away and give away.
You have to put this in perspective. If you have the actual money to do this, well go to town.. But if you are working on saving money and paying debts, that's one of the first things to change!
- You have to fight the fear of not having enough for everybody. You will. Think about the past 5 years. What did people really eat? Go with that. Don't buy the seven kinds of crackers when people only go for their two favourite kinds. Just get two kinds, or even one! They love it, good!
- Food is expensive. The big meal or buffet should not be on one person only. Propose a buffet where everybody brings something. Now, again, restrain yourself, the table will be full! Don't worry. Not everyone has to bring a dessert, bread, marinades or crackers.
- Leftovers for the next days... Yes, sounds good... but it's often Christmas fatty food, pie and cake for breakfast, pâté on bread and so on. This also brings along extra pounds, high blood sugar, heart burns. You'll have to deal with this in January along with the credit card bills you didn't realize would be as high. Only eat Christmas food on Christmas!
Gifts.... Gifts... gifts... As difficult as this sounds, it's not necessary to get everyone a gift. It's also not necessary to buy five toys for every child. I used to spend 2000$ in gifts. I'm convinced that a lot of people spend much more. Not only that, but once you have all these gifts, you also have to wrap them... Some people don't care about the wrapping, but others, like crafty people, love to make beautiful packages. There are some times where the wrapping gets more expensive than the gift itself.
- The first solution is gift exchange. People maybe nervous to propose that to their family or friends. Think that they might also be trying to reduce their bills and are too shy to bring this solution forward. Also, if you really want to pay your debts, you have to find the courage to bring it up. The excuse of not being able to get together to pick a name in a jar is not longer valid. Here is a great tool to do an online draw. People can even add their gift suggestions in it as well as matching links. You can set that spouses don't draw each others (they might be giving a gift to each other at home already), you can set it to avoid mutual draw and so on. The interface is also available in English, French and Spanish. Go check out: Pikkado. We have been using it for 5 years. We event set our gift limit to 25$!
- Lower your gift cap limit. Instead of buying everyone a 100$ gift, buy a 25$ gift.
- Children have a lot of toys. A lot. They might not need to get five new toys. Which one did they talk about for the past three months and are really dreaming about? Maybe they don't need a new toy. They might want some clothes (some do!) or books. When I was twelve, I remember really wanting Egyptian History books. How often do children get 25 new things, cannot remember who gave it to them and end up playing with 3 of them. I'm not saying that kids are brats and should not get toys. I'm saying that you're trying to reduce your Christmas bill and have to find what's really essential. Find the one thing the child really wants. He or she will be more grateful and appreciative than getting 5 cools things they didn't really want.
- What can you make? Things that you make are often priceless. I am currently learning to knit, crochet, sew, garden and bake. I also know how to do a bunch of new things. I'm planning to maximize this opportunity. My step-sister learned a that I now sew. She asked me to make her something. She asked for a bag for her iPod. Well, I knitted her a bag for her iPhone! Children care about that. More than you think. I got a ball of yarn for 3.87$ and knitted a bag. From the same ball, I'm know making a crochet winter hat and I will make a scarf. This allows me to learn new skills, create something and give a gift to someone who will appreciate a homemade thing... For the price of 1$ each....
- For the office, I'm planning to bring my Good Luck chocolate chip cookies. I can make a large batch for little money and everyone loves them. I used to buy gifts for a lot of people at the office.
- In Quebec, we have a dollar store chain called Dollorama carrying awesome wrapping stuff... for a dollar. My fiance discovered their wrapping bags. Saved his life. ;) They also have excellent gift boxes. Drop by your local dollar store and see what they have. They might also have nice decorations. They are often nicer than you'd expect. So instead of spending 7.99$ on one Christmas ball for your tree, spend one or two on six beautiful ones.
Those are only a few tips. If you dig deeper, you'll find many more. To prove you that it works, for the past four years, we paid all Christmas expenses entirely cash and additionally, we fully paid a credit card on January 1st (each year). These are victories to be celebrated! We have now paid 85.15% of our debts and are paying more each month. (The pile was huuugggeeee).
Who Am I? I'm many things. I'm passionate about tons of stuff. I love travel. I love self-improvement. I'm a sucker for optimization, efficiency, and minimalism. I renewed with mathematics and science, those are so amazing. Astronomy and chemistry are just plain awesome! I'm a student, a mentor, a traveler, a learner, an artist, an animator, and Disney brings me tears of joy! I love to grow and I will never stop! So who am I? All that and everything else I have not discovered about myself yet. It's a never ending answer!
Qui suis je? Je suis beaucoup de choses. Je suis passionné des tonnes de trucs. J'adore voyager. J'adore la croissance personnelle. Je suis vendue à l'optimisation, l'efficacité et le minimalisme. J'ai renoué avec les mathématiques et les sciences, des mondes tout simplement incroyable. L'astronomie et la chimie sont tout simplement génial! Je suis étudiante, mentor, voyageuse, artiste, animatrice et Disney m'apporte des larmes de joie! J'aime me pousser à fond et je ne cesserai jamais! Alors, qui suis-je? Tout cela et tout le reste que je n'ai pas encore découvert de moi-même. C'est une réponse sans fin!