Old man winter has once again returned. The days get shorter, the nights get colder and we all get a little nicer to one another. If you haven’t guessed it, I am speaking about the holidays. It is the time of year where most spend nights gathered around a warm fire with friends and family in preparation for Santa to grace us with his presence and my favorite thing—PRESENTS!!!
As a parent, I do not worry about the extra 10 pounds I will gain from enjoying the festive food and drink of the season, or the Grinch coming off his dark mountain top to ruin the festivities. For myself, I worry about the debt that comes from providing my loved ones the type of experience I dream of come Christmas morning.
As a father I was guilty of the greatest holiday mistakes a parent can make--overspending and incurring credit card debt that would follow me well into summer. According to a survey conducted by Market Watch in 2017, the average American spent $1,054 on credit cards, and 5% of Americans spent over $5,000 dollars. For the sake of discussion, if a family spends the yearly average and only makes the minimum payments of 25 dollars per month, it would take you until 2023 to pay off the original debt of $1,054.
Let’s break it down by the numbers. If you spend the Christmas average from 2017 and calculate the average national credit card interest rate of 15.9% interest, you would spend $499 in interest. That is practically half of the original balance in additional charges alone. It doesn’t take an investment expert to see that by continuing this cycle of minimum payments, it will take years to break free.
My intent is not to be a Scrooge this holiday, but to use the skills of preparation gained from my experience being an Army dad. Think of credit card debt like an Army ruck march and accruing interest like the weight of your pack. The fastest way to complete the course is a straight line and you would never want to add more weight to your pack along the way. With a few tips and a little planning, we can still make the holidays bright, maintain fiscal responsibility and keep our ruck sack manageable.
Like many this time of year, I love holiday movies and Christmas Vacation is my all-time favorite. If Hollywood films have taught me anything, the most important lesson is, do not be a Griswold. Clark had aspirations of grandeur with every Christmas project he laid hands on. From elaborate home lighting that required emergency power back-up from the city, to nearly killing himself trying to find the perfect tree. Never try to create the “perfect” holiday setting for your family when spending time with them is what makes the season great. Do your best to keep your own expectations obtainable and this will lead to quality time with loved ones and less harm to your body and wallet.
Paying with cash is always the best option, but for many extra cash can be hard to come by. One way to accumulate extra holiday revenue is to plan early in the year and open a designated savings account. Another option is to look for deals. The internet is a great way to find Black Friday or Cyber Monday sales that help control your bottom line and overall holiday spending. In addition, nothing shows love and caring more than a Do-It-Yourself gift. Even if you lack the skills of a carpenter, numerous how-to videos exist online that provide step-by-step instructions on creating a gift from not only your hands, but also from your heart.
For me traveling home has been my greatest cost burden. Nothing paints a better holiday picture than a Soldier returning home for the celebration, but with ticket prices skyrocketing the closer you get to the holiday, it may make travel difficult. I recommend looking for price deals and book travel 10 weeks in advance. Many travel blogs exist to provide tips and ideas to help you and your family save money. Another great help is taking advantage of perks provided from credit card companies. Many offer free miles from purchases made throughout the year or a large bonus just for signing up.
All of these ideas and tips come down to one important spending factor—set and stick with a budget that fits your family’s needs and pocketbook. A little self-control can go a long way and help with your bottom line.
I hope these tips help you the same way they have helped me over the last few years and most importantly, relieve some of the stress that can come with spending. Remember, time is best spent over the holiday creating cherished memories with the ones you hold near to your heart and not in constant fear of accruing interest and debt. So sit back, enjoy a glass or two of Grandmas eggnog and hope Cousin Eddie doesn’t leave the RV parked in the driveway until next year!