With Thanksgiving behind us, we’ve officially begun our sprint into the holiday season — and all the pressures that come with it. Finding the right gift is tough, but affording them can feel impossible if you’re struggling with student loans.
While your wish to have your loans gone for good may not come true, your pile of debt doesn’t have to turn your holiday season into a lump of coal. Recently, American Student Assistance®, the organization that writes the Student Loan Ranger, asked members of its SALT® community to share their financial experiences surviving the holidays.
Here are some simple strategies to help you afford the gifts and your loans.
[Discover 10 steps to develop a student loan repayment plan.]
— Set a budget: Before you even think about gifts, be sure to make a budget. If you don’t already have one, the holidays are a great time to pull this together.
Log all your income and expenses — including your loan payments — and look for areas in which you may be able to cut spending. When doing this, ask yourself some simple questions to determine your priorities: “Do I need ‘X’ expense more than a gift for my family?” or, “could I live without ‘Y’ expense to put some extra money in my holiday spending fund?”
Remember that every little bit counts and that these changes don’t have to be permanent. For instance, could you switch to a lesser cable package or cancel Netflix for a couple months without incurring additional fees? You can always go back to your previous arrangement, but maybe you’ll realize you like the extra money more than the discretionary expense.
[Read about the perils of skipping loan payments this holiday season.]
— Give less expensive, more meaningful gifts: Expensive gifts aren’t a holiday prerequisite. Instead, consider gifts that are meaningful but less expensive.
Michael Restiano, a Tufts University graduate working on repaying his student loans, suggests scrapbooks. “A good scrapbook is a gold mine. They’re fantastic ways to show a person how many visual memories you have with them, and how important all of those were to you. And, like any good book, it will endure the test of time.”
Restiano also recommends looking at the finer details when considering gifts. “If you pay close attention to the people you love, you’ll realize that everybody has a personal essential — a thing they cannot live without if they tried.”
Restiano said he grandfather had a beloved but beat-up Red Sox hat. For the holidays, Restiano gave his grandfather a new one. “Getting a person something related to their personal essential is a surefire way to give an amazing gift.”
— Avoid using credit cards: Another strategy that SALT community member Jose Fulgencio shared is to “not use your credit card if you know you won’t be able to make the full payment at the end of the month. Instead of purchasing gifts with a credit card, I set money aside months in advance.”
He added, “If it’s too late for that, chose whom you consider buying gifts for carefully. With a family totaling over 90 relatives, and that is just on my dad’s side, my shopping list basically came down to my parents and sisters.”
[Discover how to use credit card rewards to pay student loans.]
— Try budgeted gift exchanges: If you have a large family or a bevy of friends and coworkers to give to, SALT community member Courtney Buohl suggests planning a secret Santa gift exchange with a maximum gift amount of $10. Or consider a twist on the popular Yankee Swap.
“Have everyone bring something they already have in their house, so no one has to spend money,” she said. Another great idea is the cookie exchange.
Buohl said, “If you (like me) have a lot of friends who love baking, a cookie swap can be really fun! Everyone makes a different type of cookie and distributes five to eight cookies to everyone else; you end up with a bunch of different cookies to bring home.”
— Be honest: Sometimes, honesty truly is the best policy. If you can’t afford to buy gifts because of your student loans, let your friends and family know. Tell them that you’d prefer to not swap gifts and then put your holiday budget toward your loans this year. If they insist on still buying you something, ask for cash that you can add to your payments.
You may feel too prideful or embarrassed to go this route, but don’t. Student debt affects millions of people — perhaps that list includes your gift recipients. They may be relieved that you brought it up.
And just because you’re not swapping gifts doesn’t mean you can’t celebrate in another way. Look for inexpensive ways to spend more time together. The memories will be more worthwhile than any material items anyway.
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Practical Tips to Afford the Holidays, Student Loans originally appeared on usnews.com
