How to Stay Away from Holiday Debt

 How to Stay Away from Holiday Debt

 The holidays are just around the corner and you need your wallet to be prepared. The holiday season can be draining not only because you have to put up so many decorations, cook tons of food, and spend time with family and friends, but also because you have to spend tons of money to do so.

Don’t let this year’s holiday spending leave you in holiday debt. There is a mix of strategies that you can use to restrain your spending and shop savvy. Here are some tips to ensure that you have a fulfilling holiday that doesn’t involve going into debt.

Build a Holiday Fund. Having a specific storage space for the money you plan on using for gifts cuts down on the chances that you’ll dip into your personal savings account. This fund could be extra cash you’ve saved or even a separate savings account. Use the cash you saved first and foremost for holiday gifts, so you don’t do damage to any important savings.

Create a Spending Plan. Having a spending plan for the holidays is beneficial for not only gift buying but also the other purchases you have to make such as decorations and food. Evaluate everything you have and everything you need to get. For each category determine how much money you’ll need to spend and create a final holiday budget from that. If you’re planning on traveling during the holidays and lodging doesn’t fit into your holiday budget, stay with a friend in the area. Avoid eating out, so you can spend more on the big holiday, homemade meals. Remember to prioritize your budget. You don’t want to spend a lot on decorations to find out you don’t have enough to get your family member the gift they really wanted for Christmas.

Play It Safe with Credit Cards. Credit cards can be dangerous during the holiday season, especially if you own more than one. It’s advisable that you limit your spending to just one of your credit cards. When you limit yourself to the card with the lowest interest rate, you can save money when you’re paying off your purchases for the holiday.

Also, beware of the credit cards that stores offer you. Retailers are given incentives to push people into opening a new credit card during the holidays and will offer perks like a 20% discount for opening a card that day. Be wary of this because many stores give credit cards that have higher fees than your normal credit card providers. If you’re already thinking of getting a store credit card, be sure to do research beforehand.

Consider Using Layaway. An option for savings that is often overlooked is layaway. It spreads your spending over a few weeks or months and allows you time to get extra money. Not many stores have a layaway option during the regular season, but there are stores that are bringing it back for items such as furniture and toys. If you’re not familiar with the layaway process: the shop keeps your item for you, allowing you to make small payments towards it until you can completely pay it off.

Focus on Gifts That Are Meaningful Over Expensive. Gifts that have a lot of thought put into them and have meaning for the recipient are way more valuable than what’s the fanciest or most expensive gadget. If your budget isn’t that big, focus on gifts that will mean something to the person you’re giving it to. It can be something like a scrapbook of a trip you enjoyed with them, a coupon book, a personalized cookbook, or doing them favors you know they’d appreciate.

The Bottom Line

 The holiday season isn’t about who can spend the most. It’s about coming together with the people you love and making memories with them. Be smart this holiday season and use these tips to help you with your spending.

 

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