Nothing can be more depressing than winding up the holiday season with a pile of bills that you cannot pay. It is easy to arrive at this place. You have lots of family and friends; you promised yourself or family that you would take that holiday get-away; everyone is giddy from the shopping, holiday songs, hot chocolate and the spending is easy. We have Black Friday, Cyber Monday, and then the December “sales.” No cash? No problem, charge it. No credit card? No problem, you can apply right now and receive a discount at checkout! If you did not make a budget beforehand, you could be one of millions whose heads will be pounding from a post-holiday hangover—not from too much champagne, but from too much credit card debt.
Here Are 7 Tips to Help You Stay Out of Debt This Holiday Season
- Make a budget. Determine how much money you have to spend without needing to borrow or use your credit cards. List all the people for whom you need to buy a present. Double check and triple check to be sure you have included everyone. If you head out to shop without a good list, you will inevitably max out on your budget, return home and then realize you forgot someone. Set a realistic limit for each recipient. Research and compare prices for all the gifts you want to purchase. If your list exceeds your financial abilities, prioritize. Be sure your budget includes all your holiday costs, such as: travel, dinners, decorations, gifts for the kids’ teachers, outings and anything else that you typically do during the holiday season.
- Pool resources. If you have a large family, an alternative is to do a family pool. Each member of the family purchases a present for only one other member. This way everyone can be treated to something special and no one has to go into debt.
- Be creative. Gifts do not have to be purchased, especially if you are short on cash. Give the gift of food or a homemade item, or a coupon for a free service, such as a house cleaning, gardening, or babysitting.
- Use coupons and take advantage of all discounts. Newspapers and magazines are filled with holiday ads this time of the year. You will find many store coupons and special discount codes. Save them all. Pay attention to SMS announcements, and offers that you receive through email. Many online coupons are also valid in the store. Using these resources will help you stick to your budget and stay out of debt.
- Utilize digital technology. If you are not great at creating budgets, download one of the budget apps that are available for your mobile device. Many apps can keep a real time tab on how much you are spending, allowing you to check in every hour or so to see how you are doing.
- Leave your credit and debit cards at home. Once you have your budget, withdraw that amount from the ATM and take the cash with you to the mall. This is the best visual reminder of how much you have spent and what you have left. When the wallet is empty, it is time to go home. If you are shopping online, then you have no option but to use a credit card—not debit card.
- Shop Early. The sooner you begin your holiday shopping the better. Sales began before Thanksgiving, but they get better the first weeks of December. Waiting until the last minute means you will miss out on “real” sales and have a harder time finding what you want. The same goes with online shopping. Last minute shipping costs are excessive, and your packages may not be delivered on time. If you are going totally digital, do your shopping now.