Need ideas for a friend to avoid taking a 401k loan for the Holidays

Need ideas for a friend to avoid taking a 401k loan for the Holidays

I am posting on behalf of a friend. She has made the mistake last year to not save $$ during the year for presents for her kids for the Holiday season and had to apply for a loan against her 401k account to buy any presents at all.

 

Granted, she is a single mom and has a hard time saving - full stop. I want to help her this year, so she does not need to do the loan again. What do you do to save up for presents or if you can't save up, what do you do for presents? Any and all ideas are welcome.

5 REPLIES

Re: Need ideas for a friend to avoid taking a 401k loan for the Holidays

First, I suggest learning where your current $ is going. Free services such as mint (https://www.mint.com/) can help give insight as to how much things are costing you. They may also suggest lower interest rate credit cards etc. as part of their ad services.
Once you know where your $ is going, look for areas to reduce the spend.

I've found, food is an excellent area to stretch $. Find places that do double coupons +. Sign up for the store rewards programs. I've also seen going to "el supermarcado" had better prices on some things than big box food stores. With the holidays coming up, don't do a big turkey & ham, etc. go with just a turkey breast & cheap(er) sides.

This year, I'm doing some furniture as gifts, redoing finds from craigslist (https://www.craigslist.org/.) I find at the end of the university semester a lot of things are free if you just go pick them up. Get inspiration from Etsy (https://www.etsy.com/c/home-and-living.)

Electronics are challenging, especially if kids want the latest greatest. Last years electronics are more reasonably priced and probably do what you/they want. If you're going to avoid the Black Friday madness, check out deals from kinja (http://deals.kinja.com/)

Don't forget about Groupon (https://www.groupon.com/) they sometimes have free discounts (https://www.groupon.com/deals/shell-rewards-program.) They also offer local discounts on foods & services that make convenient gifts as well.

If you need to make extra $, don't forget about Plasma donation. It is in high demand and is a life-saving gift. It is possible to clear an additional $100+ per week, and there is still time until Christmas. Also, it helps pay down debts post-holiday spending.

Re: Need ideas for a friend to avoid taking a 401k loan for the Holidays

I love the furniture gift idea! That is something I need to look into.

 

My grandma used to make us kids thick wool socks for Christmas from old sweaters that my grandpa did not wear anymore. She never had much money but some scrap textile or thread was always something she could buy in her local village shop. My sister still sleeps with a patchwork sun shaped pillow my grandma made us nearly 15 years ago.

Re: Need ideas for a friend to avoid taking a 401k loan for the Holidays

I was a latchkey kid in the mid-90s with newly divorced parents and my mom had no money for a couple Christmases. I didn't find out till years later that the 2 or 3 gifts I got were from Goodwill. She was ashamed but I felt she had no reason to be. I'm not saying get presents at Goodwill, but buy one or two gifts instead of ten.

 

If they are older kids, tell them the truth about a budget squeeze; they can handle it and are more resilient than you realize. If they are young kids, they don't care about having lots of presents; that's capitalism and peer pressure trying to shape their future spending opinions; kids want love, time, and attention from you. Going to their holiday pageant for school or baking cookies together for Santa is more rewarding and enjoyable than spending a couple hundred dollars on something they'll lose interest in with a year or two.

Re: Need ideas for a friend to avoid taking a 401k loan for the Holidays

Thank you for sharing your story. I think we all get stuck in consumerism and try and do more than what we can afford.

Your post made me reflect on the presents I thought of buying for my kids, husband and in-laws. Some changes might be in order.

Re: Need ideas for a friend to avoid taking a 401k loan for the Holidays

10 years from now these kids aren't going to remember what they had for Christmas during this particular young time in their life.  I would advise this mother to get a strong perspective of what is really important, not some holiday that was made up. The average family this year will spend $895 for gifts and be 6 months in dept trying to pay it off.  I would advise this woman to start being concerned about the future and not following the masses. Material things don't matter people do. I am not against Christmas, but I am against being ignorant of what is important. This time should be a huge teaching lesson for her to her kids. Instead of receiving, maybe they go out and give and understand on a much higher level.