Avoid Holiday Debt
The holiday shopping season is underway, and come Black Friday, “can’t miss deals” will be everywhere. Whether you have a large family or a small one, a large bank account or a modest one, avoiding holiday debt is a challenge for most Americans. While the season of giving is often fun, it also reels many people in to large amounts of debt that they are forced to pay long after the gift exchange has occurred. There are many ways to avoid holiday debt to ensure that you end 2016 on a high financial note instead of owing the bank or your credit card company a large note – with interest.
Create a holiday budget and stick to it. The first thing you need to do is determine how much you can realistically spend on each person on your list. It is financially healthy to set limits on your spending, even during the holiday season, in order to stay out of debt. By creating a realistic budget, you can gift well and avoid over-spending.
Limit who goes on your list. This is not mean, and it is not a way to exclude people – it is simply a smart way to avoid debt. Go through your list of names of who to buy for and determine who can be marked off. Do you really need to give all of your neighbors a gift? Can you and your siblings decide to go in together for a gift for your parents and agree not to buy a gift for each other? How many of your friends really need a gift to know that you are friends? Yes, it is always nice to show others you care for them and appreciate them, but perhaps a lunch date would be more appropriate (and cheaper) than an extravagant gift.
Save money throughout the year. If you have a holiday budget, then save for it throughout the year. Setting aside $100 a month will give you $1200 to spend without any worries of debt come holiday season. Many banks offer a Christmas Club account which allows you to automatically debit a certain amount each month from your paycheck into a specific account that allows you to save for holiday spending. This is a great way to save and have enough money to spend on gifts.
Use cash. Saving money throughout the year allows you to have direct access to the money you need for holiday shopping. Take the money you have saved – along with your holiday budget – and have fun. Having cash to spend at holiday season makes you more aware of your spending because you can literally see it dwindling down.
Avoid holiday debt this year so that you can start 2017 off on the right standing.