Surviving the Holidays on a College Budget
From white elephant gift exchanges to secret Santas, ’tis the season of giving — and also spending. While you might start off the holiday season with good intentions, it’s easy to go overboard and find yourself in the red.
This year industry experts expect the average American to spend $920 on holiday gifts.
We sat down with NAU Instructional Designer and certified financial coach, Ashlee Binderim and sophomore and self-proclaimed bad budgeter Carla Betancourt to get the inside scoop on how to survive the holidays as a college student.
The average American will spend $920 on holiday gifts. Does this number surprise either of you?
Ashley — Honestly, that’s way more than I thought it would be. I don’t know if this is a good thing or a bad thing, but I spend maybe $100 on gifts for people, simply because there is so much more to Christmas than just gift giving. I think spending time, cooking together and just being with your family is more important to me than giving a physical gift.
Carla — The number definitely surprises me just because I am a broke college student at the moment, but last year I felt like I was I was really well off with money so I budgeted at $400 for my family and I found that that wasn’t really enough.
You might have said you would spend $300 and then suddenly you get invited to another holiday party or get entered into another gift exchange. And it can already be a bit of a struggle to keep a regular budget in college.
How do you add a holiday budget on top of your regular budget?
Ashley — Your most important thing to do in college is to take care of yourself. I would give yourself a limit and stick to that limit because honestly it’s probably been a couple of weeks since you’ve seen your parents — if not months — and they likely just want to spend time with you and that is probably the best gift you could give them.
So take the stress off of holiday budgeting out of the equation if it’s really that stressful for you. Just bring your presence. I think that’s really the best present you can give.
How do you recommend managing expectations?
Carla — Yesterday, I was on the phone with my mom about money, and she stressed to me that I really don’t have to worry about getting my family gifts because all they want is for me to be there for winter break.
Right now I’m kind of just planning on doing like the crafty stuff for my friends with pictures and all that memory stuff and putting it together for them. It’s basically just worrying about getting all my friends gifts that are getting me gifts.
I think they know that we’re all broke and I think they get that. I don’t think we expect a lot from one another just a little something that means something to us.
What happens when you’re out of college?
Ashley — For my co-workers, for example, I’m going to bake them cookies and that’s just my gift to them every year. I think it’s fun for me and it’s fun to see the reactions when they are eating the cookies.
So that’s really just my plan for this holiday is baking and that’s fairly affordable. It doesn’t break the bank.
Online shopping continues to be a big choice for consumers. Of people who shop online, 50 percent say they end up picking up in-store during the holiday season.
What’s your shopping style? Are you an in-store buyer or online?
Ashley — I would say I’m probably an online-buyer because that is where I can get the best deals, but if I do walk in like the dollar section of target and see that oh that’s a great gift I can give my mom or my dad or my grandma, then I’ll pick it up there. If it’s an online shopping experience, I could just send it directly to them, don’t have to worry about the shipping costs and that shipping cost really adds up. All my family is in California so I have to ship everything if we’re not going and visiting them.
Carla — I’m definitely both. I think it would just depend on how late I am. Definitely an in-store buyer if I’m doing some really late Christmas shopping, but online if I have something I really want to get for someone and plan ahead.
What are your thoughts on sale chasing? I think sometimes it can feel really overwhelming to try to chase those sales, and you end up spending more to try to get the savings.
Ashley — You do spend more because you’re like oh that’s a great deal. It is only $100 instead of $300, but you’re still spending that extra $100 on something that you may or may not have needed to begin with.
I would definitely focus on what are the things that you need right now in this moment and to only purchase those items and put blinders on for all the extra things, all the extra sales that are happening — because that’s when it really adds up.
Cash or credit?
Ashley — I am cash all the way. I actually don’t have a credit card. I know, I know it’s crazy.
Or a debit card?
Ashley — I do have a debit card just not a credit card. That helps me stay on track with budgeting and making sure that I’m keeping my financial goals in mind and not getting caught up in the here and now and I want something but I don’t need it. So I have definitely have my eyes focused on the future.
Cash really does help you to make sure when you’re down to your last dollar that’s it — that’s all you have. If you’re swiping a card, it’s a little bit easier to go over that budget and before you know it you owe thousands of dollars.
Carla what do you think as someone who is probably living in a more digital money world?
Carla — Oh yeah. I love using Apple pay and I know that it’s not a good thing — I can just use it whenever and I don’t ever limit myself. Last night I found myself using it when I shouldn’t be using it — because I really wanted Jimmy Johns.
My mom really does not want me to have like a student credit card — but I kind of want one just in case if I ever need it.
Ashley — There’s that always “just in case” that that’s why I think a lot of people have credit cards. I am living proof that you don’t need a credit card just in case. What you do need, in my opinion, is an emergency fund.
Typically, it is a $1000 emergency fund that you save up, and that covers you know any extra expense that you didn’t anticipate coming up, any like big emergencies, like you blow a tire on the freeway or things like that and so you’re creating your own sense of security without needing somebody else’s credit to do so.
If you do have a credit card, what are tips for managing how to spend?
Ashley — It’s still sticking to that budget and being very mindful of when you swipe that card, it’s there is science behind it. There’s a reason why credit cards do so well and credit card companies are really really doing well in business and that’s because when you buy something, you hand over your credit card, they hand you back the credit card, and you get to walk out of the store with that item that you just purchased. Where as if you pay with cash, then you’re handing over cash, you don’t get any cash back, and you just walk out of the store with that thing you bought and so just be really really mindful of every dollar that you’re spending and just stick to your budget.
It takes a lot of self discipline, which is why I use cash cause I don’t trust myself to use a credit card in those circumstances.
Looking forward, how can we prepare for the next holiday season?
Ashley — It’s a lot easier to buy little gifts here and there instead of lump sum at the end of the year, buy all your gifts then.
Or, you can even think about maybe you’re in a thrift store or like your mom mention oh I really want this one thing and you can just mental not, I’m going to go home and buy that thing for her today so that come December time, it’s not a couple hundred dollars worth of gifts that you’re buying. You’ve already bought all your gifts throughout the year, you just have to remember where you put them all. That the only caveat. That’s one tip.
What other tips do you have for like sticking to a budget?
Ashley — A lot of it is mindset and just being disciplined and keeping your eyes focused on whatever your goal is. For right now, my husband and I, our vision for the future and our focus is to pay off debt and be debt free and that’s what really driving us to stick to that budget.
I would create some sort of goal or vision that you have to help you stick to budgeting and that will just make it a little easier to say no to yourself in the future. Maybe you want to buy a car or vacation. Maybe you want to take a trip to Mexico or something over spring break — it’s important to keep that in mind when you are going through the months budgeting.
If you could share one piece of financial advice to bring into the new year, what would it be?
Ashley — I would say to not focus on spending too much money because you’re a student. Your job right now is to be a student and make sure you take care of yourself and go to classes and get good grades and do all those things. You probably work on top of that so just don’t worry about buying gifts for your friends and family.
Write them a meaningful card. You can walk the aisles of the dollar store and pick up cards there. Doing little things like that are much more meaningful than buying a sweater that your mom could have bought for herself. All your parents (and friends) really want is to spend time with you — Time is honestly the best gift that you can give. Enjoy those experiences together and the memories created.
Carla, what advice might you have for parents?
Carla — Definitely, never underestimate the power of a care package