Tag: Holidays

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5 Clever Ways to Give Money as a Gift

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

It is truly better to give than to receive. But sometimes the best gifts aren’t the traditional ones that can be wrapped or worn but ones that can change your financial future for the better. Though cash and gift cards are always appreciated, here are a few ways to think outside the box.

Give Stocks

Gift cards are one of the most popular gifts for the holidays. But instead of giving your friends and family money to shop at their favorite store, you can give them ownership of that store through owning stock.

There are several ways to do this. You can use a service like Stockpile, GiveAshare or Unique Stock Gift. If you already own a stock and you want to transfer the ownership, you can do it through your brokerage firm where you purchased the stock. Below I will explain the benefits and drawbacks of each method.

Of the three services, Stockpile is the most affordable option and offers the most features (read our full review of Stockpile).

Stockpile offers more than 1,000 different stocks and ETFs (exchange traded funds) to choose from. In addition, you’re allowed to buy fractional shares of any company that you choose. Instead of paying full price for the stock, you have the option of buying a portion of it. For example, as of this date, Google, also known as Alphabet, Inc. (GOOG), is trading around $800 per share. If that price is above your budget, you can choose to buy just 10% of a single share or $80 worth. You also have the option of giving a gift card, allowing the recipient to buy shares in a company of their choosing. One they’ve bought the stock, they can track their performance with the Stockpile app.

Stockpile giftcard

GiveAshare and Unique Stock Gift are similar services that allow you to buy a physical stock certificate and frame it. These are excellent gifts for your home or office. GiveAshare offers more than 100 of the most well known stocks such as Nike, Disney, Facebook, and Microsoft. Purchasing a stock through them legally registers you as a shareholder, which means you would be entitled to receive dividends, annual reports, and other stockholder benefits just as if you bought the stock online. The price will depend primarily on the company you choose and what framing options you select. Unique Stock Gift is very similar to GiveAshare but offers more than 190 stock choices.

If you already own shares of a company and you’re looking to transfer ownership, you have to contact your brokerage firm to ask for a transfer form. If you’re transferring stock to a minor, they will have to open up a custodial account to receive the stock. A custodial account is an investing account a parent can set up for their child. All investing decisions must be made for the benefit of the child, and when he or she reaches a certain age (usually 18 or 21, depending on the state), they take control over the account. Any cash or investments that go into the custodial account may not be transferred out of the account and back to the parent.

Pay a Student Loan Bill

Students Studying Learning Education

It may not sound like much of a gift but student loans have become a huge burden for millions of people. Making one student loan payment for someone can really make a difference, especially for the 40% of Americans who are behind on their payments or can’t pay at all.

For starters, you could take the most obvious route and write a check for the amount of their monthly bill. For some, this may seem too impersonal, nor is it guaranteed to go to the loan. So far, there is one service offered by Gift of College that allows you help pay off student loans online or with a gift card. Gift of College uses the concept of a gift registry but allows you to contribute to paying off student loans or saving for college with a 529 plan. More on the 529 plan option below.

Start a 529 College Savings Plan

Start a 529 College Savings Plan

Want to help someone get a head start on the cost of college? A 529 plan allows you to save and invest toward the cost of education. To start a 529 plan, you could simply open the account at your favorite brokerage firm or with your financial adviser. Unlike custodial accounts, a 529 plan grows tax free and can be used only for college expenses. Additionally, anyone can help contribute to the plan, which can help multiply your initial efforts. Instead of making a one-time gift, you and other family members could contribute to the plan every year for birthdays and the holidays. Gift of College allows you to contribute to a 529 plan in the same way you would buy a gift card, making the process much easier by allowing you to contribute online and at select Toys R Us stores. To research college savings plan options, a great place to start is the College Savings Plans Network.

Help Save for a Goal

Wealth growth savings investing save

If you’re looking to teach your child how to set financial goals and save, iSow is the perfect platform. Think of it like GoFundMe for gift giving. The site allows kids ages 13 and older to save for one of three options: Savings, Causes, or Wishes. If your child is under age 13, you will have to sign up for them. Once you goal is set, you receive a customized link to share on social media, or you can add the link for special events like birthdays.

The Old-Fashioned Piggy Bank

Piggy bank wrapped in Christmas string lights

A piggy bank might seem like the least exciting gift idea on the list; however, teaching your children how to save could be the most powerful gift of all.  Go a step further and open a savings account under a loved one’s name. The entire family can contribute to the savings account instead of giving physical presents. Good financial habits start at home. Research has found that adults who learned financial literacy as children received better mortgage loan performance including a lower rate of foreclosure. With the right financial education, your kids can make the best decisions with any financial gift.

Kevin Matthews II
Kevin Matthews II |

Kevin Matthews II is a writer at MagnifyMoney. You can email Kevin here

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5 Ways to Give Back this Holiday Season

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

Father and daughter donating toys at Christmas charity drive

Why is it ‘better to give than to receive?’ Simply put, because it’s good for you. Studies have shown over and over that gift giving can have major psychological and sociological benefits.

An act of altruism, or acting in someone else’s interest, actually releases endorphins in your brain and helps prolong your life.

Another benefit of giving — for those of us trying to avoid racking up credit card debt this holiday season — is that it doesn’t have to cost a thing. This holiday season, you can give your time, resources, or talents to benefit others. 

We’ve put together 5 easy, convenient, and wallet-friendly ways to give the gift of service this holiday season.

Get the Whole Family Involved

The best part about giving is that it’s easy to get the whole family involved.

Start a giving game with your family members. For example, for each gift a child receives, the family must agree to donate a gift or toy to a special cause.

Another option: have every member write a note saying what they are grateful for about each family member. Then, get together and have each person read the notes about themselves. Add a discussion afterward to drive the lesson home.

Crowd gifting platform, iSow, is one way to teach your kids about finance and philanthropy this season. You can create accounts for your kid and teach them to set savings goals. When the holidays come around, family and friends can ‘gift’ money to these accounts and help your kid reach their goal.

iSow has partnered with KidsShoes.com this season for a #KidsHelpingKids Campaign. To participate, all your child would have to do is assign one of their goals to a kids-related cause. For each kid that signs up, KidsShoes.com gives the first donation up to $10,000.

Cook or Deliver a Meal

Enjoy your holiday feast with the knowledge that you’ve done something to help others go to sleep with a full stomach, too.

Consider donating your culinary talents or time to an organization that delivers or serves meals during the holidays. Call your local Salvation Army, Meals on Wheels, veterans or hospice organizations to sign up to help deliver meals or ask if they need help with other services.

Make sure to call at least a few weeks in advance as you might need to receive special training and these organizations may have a spike in volunteer requests during the holidays.

Make Holiday Cards for Those Away From Home

If you are lucky to spend the holiday with your family, consider sending a card, letter, or gift to those who aren’t as fortunate. Every year, thousands of well-wishers send holiday greetings to deployed military personnel, hospitalized patients, and those who work to keep our communities running while we celebrate, such as firemen and the police.

To write to military personnel, try contacting a letter-writing organization like Operation Gratitude, Soldier’s Angels, or Operation We Are Here to get the information you’d need.

Call your local hospital and ask to ask for permission to make get well cards, or send gifts for patients who are hospitalized over the holiday season. Get an idea of how many cards or gifts you’d need to make or collect to make sure everyone gets one. Round up some friends and family to help you get everything together.

Donate Money or Items to a Drive

Another easy and fun way to get friends and family in the giving spirit is to join or set up a donation drive that could benefit your community. The options are endless. A few ideas:

  • Arrange to collect canned food for an organization supporting the homeless or a local food pantry.
  • Have a yard sale to raise funds for a non-profit organization you care about.
  • Host a party where guests can bring a toy drive to donate to an organization that gives them to chronically ill children such as Andrew’s Toy Box. 
  • Set a goal on crowdfunding sites such as Crowdrise, Razoo, Causes, or Indiegogo and raise money from friends and family to donate to a charity or cause you are passionate about.
  • Collect new or lightly used children’s’ books from your coworkers to donate to a local elementary school’s library (they can be added to the library or sold for money to benefit the library).

Always make sure to call ahead and ask (1) if the organization, school, etc. accepts donations, and (2) what kinds of items the organization needs most. Calling beforehand helps ensure your donation will be helpful to them.

You can also participate in national gift drives such as Toys for Tots, the Children’s Hospital Foundation, or Christmas Toy Drive. These organizations have deadlines and rules to donate so be sure to visit their websites or contact them for that information. 

Give Songs & Smiles

Bring back to life an old-school tradition and go caroling. Practice a few songs with family or friends and share your talents with those in a local homeless shelter or elderly home. Again, call them first to make sure it’s okay. You could also consider making a few baked goods and stop by a police station or firehouse, or hospital to give them to holiday workers to enjoy as you sing.

Brittney Laryea
Brittney Laryea |

Brittney Laryea is a writer at MagnifyMoney. You can email Brittney at brittney@magnifymoney.com

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10 Ways to Help Your Kids Give Back this Holiday Season

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

Santa Claus purchasing online

Ask your kids what they would like for the holidays this year, and they might come back to you with a wish list a mile long. Kids can easily get swept up into the consumerism of the season.

It’s perfectly fine for kids to get excited about the holidays, but it’s important to teach them to balance both giving and receiving. Teach them from a young age to give back to the less fortunate members of their community. Learning how and when to give back, will teach your child to have respect for both the value of money and the less fortunate members of the community.

The holidays are the perfect time of year to help your kids get involved in the community. Encourage your child to explore their charitable side by helping them get involved in activities that help others. Consider using a few of these 10 ways to help your kids give back this holiday season.

1. Donate toys

For many people, the holidays evoke images of beautifully wrapped gifts for children. Kids get excited buying toys for other kids, so donating toys is a great way to encourage your child to give back. Help them to pick out one or two gifts for children the same age, and give the gift of joy that comes with opening a gift during the holidays.

Many religious communities offer toy donations programs like Angel tree to help give back to the community. However, the most widely recognized toy gifting program is Toys for Tots with the United States Marine Corps. Visit the website to find your nearest Toys for Tots drop off site and get involved in helping less fortunate kids this season.

2. Donate clothes

The Salvation Army International always needs more clothes. Especially with the holidays coming up, your children will most likely receive new pieces of clothing to complement their wardrobe. Together with your child, take a few hours to sort through their clothes. Make space in their closet by donating all of their gently used items they no longer wear or fit into.

3. Donate coats

Too many children face a bitterly cold holiday season. They go to bed huddled under their warmest blankets, and it’s not always enough. No child should have to trudge to school in threadbare coats either.

Give your child the opportunity to help another child in need by signing up to hold a coat drive for new or gently used coats through One Warm Coat. Another great coat program is Operation Warm which works to provide brand new coats to children in need. Any cash donation to Operation Warm is tax deductible and 97 cents of every dollar donated goes towards purchasing new coats.

4. Donate canned goods

Help feed hungry families this holiday season by buying and donating canned good items to your local food pantry or homeless shelter. Let your child do a few chores to earn money that they can use to buy food items to donate. They will feel empowered and proud to have worked for the items they donate.

Before you go shopping, call ahead to your local organization and ask what items they need most on their shelves this time of year. Often the food pantry shelves go through stages of being too full of one item, like peanut butter or noodles and not enough of other key ingredients.

5. Serve food

After you drop off your canned goods donations, stop into the administrative office and ask if they have room for more volunteers. Young children may not be able to help serve actual food due to liability and health reasons, but they will be able to help in other ways while you serve meals to the struggling members of the community.

6. Spend time with elderly

Due to illness and distance, too many members of older generations will spend the holidays completely alone. Sign yourself and your child up as volunteers to spend time with the elderly this holiday season. Bring games to play, crafts to complete, or their favorite book to read. Sing carols, share a baked treat, or simply be an ear for them to tell their stories too. Your child can learn a great deal by volunteering some time with the eldest in the community.

7. Pick up trash

Bring gloves and trash bags on your next walk along the beach or to a local park. Show your child that giving back to the community can be as simple as helping to keep wildlife areas free of litter.

8. Volunteer in an animal shelter

Become a volunteer to help out with an animal shelter. Children love animals and the animal shelters always need the extra hands to help. Your child can volunteer to play with animals, take dogs for walks, help with adoption events, fill water bowls, and sweep out cages.

9. Take baked goods to the police and fire stations

The men and women who serve, protect, and defend our communities as firefighters, police officers, EMTs and paramedics work long hours for little pay. Most of these public servants have to work on the holidays and don’t get to enjoy spending time with their loved ones.

Help your child to show gratitude for the hard work and dedication of these men and woman by bringing holiday care packages or baked goods to their stations. Police and firefighters love getting the chance to interact with the youngest members of their community, and they would welcome a plate of brownies or some holiday cookies as a rare and unexpected treat.

10. Write and send holiday cards to deployed troops

The American Red Cross’s Holiday Mail for Heroes campaign works together with local communities to send holiday cards to troops deployed to active war zones and stations overseas.

Reach out to your local Red Cross station to see if they plan to participate in this year’s campaign. Show your child that they have the ability to bring hope and encouragement to the men and women who are in dangerous zones and separated from their loved ones this holiday season.

The holiday season of giving

Ask your child what they have that they’re willing to give. Encourage them to work extra household chores to be able to purchase a toy for another child with their own money. Get them involved by signing them up to spend time with others.

Also, if you feel so inclined, remember to save a receipt of any of your donations to use for your charitable contribution deductions when you file your taxes in April. It’s ok to write off any of your food, clothing, or toy donations that have the opportunity for a receipt.

Kristi Muse |

Kristi Muse is a writer at MagnifyMoney. You can email Kristi at kristi@magnifymoney.com

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Gifting Memories Instead of Presents

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

Santa Claus purchasing online

How much do you plan to spend on presents this holiday season? A recent Gallup poll shows Americans plan to spend, on average, $830 on Christmas gifts in 2015. 30 percent have said they plan on spending $1,000. This is a stark contrast to the estimated $720 adults were willing to spend just last year, but lower than a MagnifyMoney survey that concluded people added $986 of holiday debt on average in 2014.

I have one question: Why?

Why has gift giving gotten so out of hand? Do presents make or break the holidays? If they do, I’d urge you to reconsider what the holidays mean to you. What’s worse, many Americans will likely go into debt to buy these presents. Is there a justifiable reason for it? Probably not.

To me, the holidays are a time to focus on loved ones, not consumerism. In that spirit, I’ve been gifting memories instead of presents for the past few years, and I plan to continue that this year.

Here’s why I’m not a fan of participating in the gift-giving madness that permeates through our culture, why I wish more people would reconsider their gift-giving strategy, and how you can gift memories instead of presents.

Presents Equaled Debt Growing Up

Previously, I wrote about helping my parents get out of debt. At least part of that debt was due to the holidays.

Of course, when we’re younger, we assume Santa is responsible for the nice display of presents under the tree. That façade falls away eventually. For me, it was like having a rug snapped out from under me.

My dad lost his job when I was around 8 years old, and I remember money being extremely tight. My mom would pinch pennies wherever she could. I remember getting told “no” at the grocery store a lot. When it came to Christmas, they somehow managed to get what was on my list.

As I grew older, I became aware of what they were sacrificing to put those presents under the tree. One particular instance from over a decade ago remains clear in my mind.

We were taking decorations down a few days after Christmas, and my dad was dismantling our artificial tree.

As he removed a branch, he discovered a present he forgot he had hidden within the tree. In my excitement, I unwrapped it quickly, only to find it was a toy similar to one I already had.

I can’t tell you exactly why that moment hit me so hard, but I ran off to my room with tears streaming down my face. I felt incredibly guilty and selfish for my feelings of disappointment. I knew my parents wanted to make me happy, and they had it in their minds that presents were a way to show their love.

Unfortunately, that feeling of guilt never left me. I’ve become somewhat of a scrooge in the eyes of my family around the holidays. My mom still insists I need something to open on Christmas morning. My parents don’t understand their company is enough. They insist on there being presents under the tree. “It’s tradition,” they say.

holiday debt

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Breaking Holiday Gift-Giving Traditions

Well, I’m all about breaking tradition. I don’t see the point in Black Friday, and I certainly don’t see the point in going into debt to buy presents, no matter what your intentions are.

I also don’t see the point in buying gifts without questioning the value behind them. Many people buy gifts just for the sake of giving them, causing an awkward situation for the recipient who doesn’t have a clue what to do with the unwanted gift. Other times, there’s a competition among relatives to see who can buy the most expensive presents.

Where’s the holiday spirit in any of that? There isn’t any. Gift giving becomes an overwhelming, uncontrollable beast, resulting in people spending nearly $1,000 over the course of a few short months.

What’s left at the end of it? A bunch of discarded wrapping paper. Once the high of surprises has worn off, there’s nothing left to look forward to, except possibly standing in long “return” lines and figuring out how to spend store credit.

Melodrama aside, I’m not saying we should completely abandon giving presents, but we need to be thoughtful about the process. I know plenty of people who genuinely want their present to make someone’s day, and that’s great. But I also know a number of people who feel pressured to shop out of tradition. No matter how many times I tell my family to give me cash if they have to give me something, they find it unacceptable.

If you’re in this situation, or if you’re part of a family who can’t get past tradition, gifting memories can be a great alternative. It’s much more meaningful and fulfilling than simply giving an unneeded gift.

There’s no guilt associated with it, and gifting memories can be as expensive or inexpensive as you want, making it a win-win situation for everyone.

[6 Strategies to Keep Your Holiday Spending Low]

How to Gift Memories

Creating memories with your loved ones is what the holidays are all about, in my opinion. There’s nothing I love more than giving my time and attention rather than another shirt, candle, or piece of jewelry. This idea might sound strange at first, but after a few examples, you’ll come up with some of your own. It’s a simple matter of redefining the meaning of a “present”.

Help Out With the Festivities

Who hosts the major holidays in your family? My grandma has always had Christmas Eve at her house. My family is Italian, which means going all out in terms of food and dessert. My grandma also has a special cookie recipe she saves just for the holidays because they’re extremely time consuming to bake.

When I was younger, my mom would drop me off at my grandma’s house on the weekend, and we would bake cookies for the entire day. I would help her as much as possible, and she was always grateful. Baking might sound simple, but it was an all-day affair for her, and standing for long periods of time left her back aching. It was a joy for me to spend a day with my grandma, and I got to eat cookies as a reward. We talked throughout the day and relaxed at night. I still remember those days fondly.

I do the same for my mom when it comes to cooking now that I’m older and have a bit more experience in the kitchen. While only four of us gather for the holidays now, she still gets stressed out about preparation. I’ll make a dish at home and bring it with me, or I’ll get to my parent’s house a day early and help there.

Either way, I’m sure any host would be happy to have help in the kitchen. Cooking can be exhausting, especially if your family is huge! Bonus points if you make a dish your family absolutely wouldn’t want to miss out on. That shows love and dedication more than any gift does.

Decorate and Spread Holiday Joy

Is there a family member who loves to decorate, but needs assistance? My grandma has all her decorations in her attic, which requires going up and down a steep set of stairs. While she’s perfectly capable of doing it (even at 84), decorating can be a lot of work. Growing up, decorating was the family tradition in our household. My mom and I would decorate the windows and put ornaments on the tree, and my dad would assemble the tree and string the lights.

One year, I went to a conference and had to miss out. I came back to a fully decorated house, and felt somewhat disappointed. It’s something I look forward to every year. Even though my parents don’t need a lot of help, we see it as a way to spend quality time together. Nothing says holiday spirit like decorating and singing to holiday music.

Volunteer

Giving your time to a charitable cause is one of the best ways to make meaningful memories with your family, especially if you have kids. Pick a charitable organization you can all get behind as a family, and find a way to help. Sometimes, there’s no greater gift you can receive than simply giving back.

Get Together and Create Gifts

Guess what, your family doesn’t have to be crafty to create presents. I’d argue the less crafty you are, the better, as it makes it more entertaining. One year, I attempted to make ornaments for everyone. I went to a craft store, got the glass bulbs and paint, and went to work with my then-boyfriend. It was a lot more fun than we thought it would be, and my parents stopped in to watch (much to their amusement).

Grab a tutorial from YouTube or Pinterest, and have everyone follow along with it. See who comes up with the best and the worst creations, and then exchange them. At the very least, that gift will serve as a reminder of the fun memories you made.

If you happen to be crafty and have a few relatives or friends who are, why not get together and work on your gifts in one big room? You might inspire each other, and you could also learn a new skill. I used to watch my mom and aunt knit together, and my aunt would always give my mom tips. You can swap gifts with each other, or possibly work on one big gift for the entire family together.

Focus on What Matters

No matter what memories you create with your loved ones this holiday season, never lose focus on what matters. If you have children, remember that your actions reflect your family values. Do you want your child to grow up valuing stuff more than experiences? Are they going to remember the present you got them when they were six years old, or are they going to remember the wonderful time you all had as a family picking out a tree, decorating, and playing games?

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Erin Millard
Erin Millard |

Erin Millard is a writer at MagnifyMoney. You can email Erin at erinm@magnifymoney.com

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Pay Down My Debt

Americans with Holiday Debt Added $986 on Average

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

Young couple calculating their domestic bills

The holidays over, and we are back to work.

But for many of us, the holidays linger in fresh debt that paid for holiday gifts and celebrations, with bills that will start hitting mailboxes in the coming weeks.

MagnifyMoney surveyed a national sample of 403 Americans who reported they added debt during the holidays via Survata and found:

Americans with holiday debt added $986 in debt on average.

Between gifts, hosting parties, family emergencies, and for some, fewer work hours, it’s easy for debt to add up if you don’t have savings on hand. While the $986 those surveyed added to their debt on average is a manageable amount, it can easily snowball.

At a 15% rate on a credit card making just the minimum $25 payment it would take 10 years to pay off, including nearly $400 in interest paid, almost doubling the cost of the holidays.

44% of debt holders report they are stressed out about it.

 

Credit cards were the most common form of debt.

52% of debt holders used a bank or credit union credit card to finance their holiday debt, while another 30% used store cards to finance, which often carry rates of 20% or more. 8% took a specific personal loan, which could yield a lower rate, while 6% relied on the worst of all – payday and title loans. Less than 5% used home equity lines of credit to finance purchases.

The payoff may take until next Christmas and beyond

Less than half of those surveyed think they can pay off their holiday debt in less than 5 months. 55% plan to take more than 5 months or just make the minimum payments,  which could extend the debt to 10 years or more.

holiday-debt-2

Rates being paid are high

One third of respondents say they’re paying a rate of over 10% on their debt, with 20% of them paying more than 15%. And 14% of respondents don’t even know what rate they’re paying.

But most won’t bother to get a lower rate

Despite 28% of respondents expecting to take 5 months or more to pay off the debt, just 22% plan to shop around to find a better rate with a different bank or loan.

Yet, 47% report a good credit score above 650 that may qualify for better rates than most existing credit cards and store cards offer.

The most cited reason for not wanting to shop around is not wanting to deal with another bank, noted by 28% of respondents.

A consumer with $1,000 in debt at a 15% rate making minimum payments would shave over a year off debt repayment by taking advantage of the longest 0% balance transfer deal on the market and save over $300 in interest payments.

What can be done?

MagnifyMoney has prepared a free 45 page Debt Free Forever Guide that you can download to prepare your action plan, tailored to whether your situation needs a quick transfer, or more significant repair and dealing with collections.

You’ll learn no-nonsense ways to get your rate lower, negotiate hard with creditors, and tackle your budget to find the fastest way to get debt free.

Survey results

Average new holiday debt   $986

Holiday debt funded by a….  

  • Credit card       52%
  • Store card        30%
  • Personal loan   8%
  • Payday / title loan  6%
  • Home equity    4%

holiday-debt-1

When will you pay the debt off?        

  • 1 month           15%
  • 2 months         11%
  • 3 months         12%
  • 4 months         6%
  • 5 months+       28%
  • Only making minimum payments        27%

What is your credit score?      

  • Above 700       27%
  • 650-700           20%
  • 550-649           20%
  • Below 550       10%
  • Don’t know      25%

Will you shop around for a better rate with a different bank or loan? 

  • Yes      22%
  • No- Don’t want to deal with another bank       28%
  • No – Too many traps   17%
  • No – Rate is already low          10%
  • No – Don’t know enough about it        10%
  • No – Wouldn’t qualify 14%

How stressed are you about your holiday debt?        

  • Not stressed    56%
  • Stressed           44%

What rate are you paying on your debt?        

  • Less than 5%   35%
  • 5-9%   18%
  • 10-14%           13%
  • 15-19%           11%
  • 20% or more   9%
  • Don’t know      14%

Methodology

MagnifyMoney surveyed 403 Americans who answered yes to the screening question “Did you add debt for holiday spending this year?”

The survey was conducted online January 2 – 4 2015 via Survata, using a nationally representative sample age 25-65.

Nick Clements
Nick Clements |

Nick Clements is a writer at MagnifyMoney. You can email Nick at nick@magnifymoney.com

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Strategies to Save

5 Steps to Avoid Blowing Your Budget This Holiday Season

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

Santa Claus purchasing online

This is supposed to be the most wonderful time of the year – and it can be if we’re talking about spending time with friends and family or enjoying the seasonal festivities.

But when it comes to your budget this time of year, things probably aren’t quite as wonderful. Let’s not kid ourselves; the holiday season gets expensive. The cost of hosting fancy dinners, throwing parties, and buying presents for every single person you know adds up, and fast.

If you’re trying to create better money management habits and rein in your spending, you need to know how to get through the holidays without blowing your budget – and without earning yourself a label like “Scrooge” or “Grinch.” Here’s how you can walk that fine line between sticking to your budget and enjoying the season:

1. Create a Spending Plan

Your budget may get you through other months of the year just fine. But in November and December, you’ll likely face additional expenses and higher costs. Prepare ahead of time and arm yourself with a spending plan.

Create your budget now for your holiday spending. List out the additional expenses you’ll have from now until the end of the year. You may need to cut back on your normal discretionary spending to make room for purchasing gifts, buying more alcohol to bring to parties, or accounting for a big grocery bill if you need to help out with holiday meals.

Once you set a spending plan, stick to it. Avoid impulsive purchases when doing your holiday shopping, and don’t pick up any items you didn’t plan for. That means don’t buy items for yourself while you’re out picking up gifts for others.

2. Skip Black Friday (But Consider Cyber Monday, If You Must)

The “deals” you’ll have access to aren’t usually worth getting caught up in the madness, stress, and consumer feeding frenzy that is Black Friday in America. Keep in mind this is a retail holiday created by for-profit companies. It’s not about giving you a deal, and there are several reasons you won’t score the amazing savings you think you will.

Let’s start with the fact that most stores have limited quantities of sale items (and they may or may not disclose that fact in their advertising). You’re unlikely to pick up more than one coveted item on your list. Or any item, if you weren’t waiting in line days before the event started. While you still get the insane footage of people stampeding through stores, many retailers hand out numbered tickets on the hottest items before the rush begins.

So it doesn’t matter if you hurdle over grannies and push little kids out of the way. If they have an entire base camp set up outside Best Buy and you show up after them, they have the golden ticket and you don’t.

And many of the doorbuster deals aren’t on quality products. The sale items aren’t the top-of-the-line, best version of the product. Many manufacturers make items specifically for Black Friday that are cheaper than the versions normally stocked in stores. If you care about quality, you’re better off shopping regular sales throughout the year (or sales that pop up between Thanksgiving and Christmas).

Finally, biggest reason you’re not getting a deal is because your savings may be completely manufactured. Retailers often mark prices up ahead of Black Friday, so they can reduce them and make it look like you scored a great deal. Others will never intend to sell an item at the “full price” at all.

Just because the tag says an item was originally $100 and now it’s on sale for $50 does not mean you saved $50.

If you just have to participate in a designated sale day, wait until Cyber Monday and shop online. Do price comparisons and use promo codes – and have your shopping list beside you as you go. Don’t deviate from it and buy things just because they’re “on sale!”

You’ll save time and stress (and there’s no chance you’ll make the evening news as the crazed individual who got into a fist fight over a children’s toy down at the local WalMart).

And if you created a budget surplus – or spend less than you thought you would when you created your spending plan – Abigail from I Pick Up Pennies suggests transferring that money over into your savings account. Make that money into real savings!

3. Focus on What’s Truly Important

One of my favorite ways to get through the holidays without busting my budget is to keep the focus on what provides real happiness and fulfillment in life: relationships, not material stuff. Don’t obsess over giving and getting things this year. Instead, make it a point to spend quality time with those you care most about in your life.

Get others on board by suggesting get-togethers where gifts aren’t the main purpose of the event. Instead of gift swaps between your friends or you coworkers, suggest getting together for a meal. You can go out or go homemade – either way, the total cost should be less per person than trying to purchase gifts for a group.

Or host a party and encourage guests to contribute in some way. That might mean asking each person to bring a dish or a drink, or bring ingredients for a big cookie bake-off and decorating contest. Make it fun and get creative.

You don’t need the point of all holiday gatherings to show off stuff to impress everyone, or to exchange things that you really don’t need. Focus on the relationships you care about, not stuff.

4. Use Tools to Make the Most of Your Money

Most of us will face some holiday expenses that we just can’t get out of. Maybe some members of your family refuse to give up on the idea of an extravagant gift-giving tradition. Or perhaps your coworkers are dead-set on collecting presents for an office swap or for your boss.

Whatever the reason, make the most of the money you absolutely need to spend by using the tools available to you. You can use Magnify Money’s comparison tools to find the best cash back rewards to help you earn money for the purchases you needed to make anyway.

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(And if you’re not sure where to stash your savings from those deals you got on Black Friday or Cyber Monday? Magnify Money can help you find the savings accounts with the highest interest rates, too.)

5. Just Say “No”

If all else fails, remember that there are no holiday laws that say you need to participate in every single event, tradition, party, or meal. Only you know your financial situation, and only you can make the right decisions that will get you through this time of year with your budget intact.

Don’t be afraid to (politely) decline activities or events that you know will stretch your budget. You can only fulfill so many obligations during the holiday season, so prioritize.

Don’t attend the parties and get-togethers you didn’t want to go to in the first place, and don’t go to those that will force you to spend more money than you can afford.

You can make this the most wonderful time of the year both for you and your budget if you shop smart, value cultivating your relationships over receiving more stuff, and remembering that only you know what your finances can handle.

Kali Hawlk
Kali Hawlk |

Kali Hawlk is a writer at MagnifyMoney. You can email Kali at Kali@magnifymoney.com

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