How to Avoid Holiday Debt

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The holidays are an exciting time for many shoppers.  Yet, many people cannot avoid the temptation to overspend, causing them to start the New Year with additional debt. Don’t let December’s delights become January’s jumbled-mess.  If you want to know how to avoid holiday debt, here are six ways to save on your spending.

Set a Budget

Before setting your budget, first make sure to perform a personal financial audit.  Tally your available capital; and commit to staying within your means.  

Do not go into debt to give someone a gift.  A budget will help you to take into account the number of people you are buying for; and set a firm limit on what you’re willing to spend on each person on your gift-giving list.

Leave Credit Cards at Home

If they’re out of sight, they cannot be swiped.  Leaving your credit cards at home will help you to resist the temptation to make impulse purchases.  

That being said, if you do have to use a credit card, make sure to use just one – preferably, one that gives you rewards for spending.  And always make sure to stick to your pre-set budget.

Pay With Cash

If you only use cash, you will not have to deal with exceeding your credit limit or having to pay any credit card interest.  If you do have to make a big purchase and don’t have the ready cash available, there are other options besides charging a credit card – like paying in installments.

Use Layaway

Using layaway is a great way to avoid charging your credit card; and many big retailers are bringing this option back for the holidays.  If you shop early, you will have months to pay for your purchases.

Save for The Holidays

Many banks have holiday savings funds.  Every month, you can put money into this account – which is earmarked for use during the holidays.  This is a great way to avoid debt because you can set your budget by the amount you saved.

Do Not Pay Full Price

Bargain shop. This might be a little time consuming, but your wallet will thank you. The best way to bargain shop is to check your local weekly sales ads; and to search the Internet for specials on the items on your gift list.

The holidays should be a time of health and happiness.  This applies as much to your financial health as it does your personal health.  By using the six tools outlined above, you can help to avoid mortgaging your future and accruing unnecessary holiday debt.

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