6 Ways to Stay Out of Debt this Holiday Season
- Created on Wednesday, 11 December 2013 00:17
- Last Updated on Sunday, 19 January 2014 12:55
- Written by Jemine
- Hits: 888
Once the holiday season rolls around, chances are your budget changes almost immediately. There’s a lot more spending and a lot less saving going on.
Not only do you purchase gifts for loved ones, but you probably also buy extra food or specialty food, and spend money on entertaining and decorations. Everything about the holiday season invites you to spend more money. It’s easy to let things get out of hand and start racking up the debt.
You don’t have to, though. In fact, many of us plan to avoid debt this holiday season. If you want to join us, here are some of the best strategies for doing just that.
1. Set a Reasonable Budget
Many people start out by listing the gifts they want to purchase for everyone. This is a short road to frustration, throwing your hands up and pulling out the credit cards. Instead, figure out a realistic holiday budget for every aspect of your holiday spending. Make a food budget, wrapping paper budget, gift budget and decoration budget.
Once you have your budget created, you can fit everything into it. Don’t start out by listing what you think you need for the holidaysd. Instead, start out by acknowledging your financial resources. You might be surprised at what you can leave off your list.
For next year, start budgeting much earlier. If you find yourself in a bind this year, create a plan for next year and start implementing it early. Add up what you spent this year and add 10 percent. Make a plan to set aside money in a high-yield savings account each month from February to October. That way, when the holidays arrive next year, you have the money.
. Look for Good Deals
There are a number of tools that make price matching easy during the holidays. Smart phone apps, price trackers and price matching can help you find the best deals of the holiday season.
Go to the dollar store to look for deals on stocking stuffers, wrapping paper (and gift bags), decorations and greeting cards. You can also find great deals on tablecloths, disposable place settings and napkins — perfect for entertaining.
One of my favorite ways to save money on the holidays is to wait until January to buy decorations, wrapping paper and greeting cards. All of these items are drastically discounted after the holidays.
3. Be Grateful You Missed the Black Friday Hype
Did you know that one of the best times to buy small consumer electronics is early December? Making these purchases on Black Friday won’t help you much. In fact, shopping on Black Friday might be a waste of time. Many stores offer better prices on popular items throughout the year. Also consider staying home and shopping online. The deals are just as good — or better — and many online retailers offer free shipping.
Consumer Reports offers a great of the best times to buy certain items, Shop for the holidays year-round, and you might get better deals than you’d get on Black Friday.
4. Get Creative with Your Entertaining
You don’t have to put together a huge fancy party for the holidays. If you don’t want to break the budget on a sit-down dinner, have an evening party with dessert. You can consider such ideas as a potluck, in which everyone brings something, or a progressive dinner, in which a portion of the dinner is served at a different home.
In many large families, it is common to draw names for gifts, rather than require everyone to get gifts for everyone else. This can help everyone stick to a budget. Another fun way to approach gift-giving is to require a homemade holiday. There are many great ideas for homemade, heartfelt gifts that don’t cost much to make but that convey a lot of love.
5. Use Credit Card Rewards
Now is the perfect time to use your credit card rewards. You’ve been earning them all year, so use them now. Track all your spending, and stick to your holiday budget, but pay with your credit card. Redeem your rewards for a statement credit to help pay down the credit card. Of course, using your credit card only works if you can pay off the balance — through a combination of statement credit and cash on hand — without incurring interest.
Some credit cards allow you to redeem your rewrds for gift cards. If this is a possibility (and especially if you get a bonus for choosing gift cards), redeem your rewards and then do a portion of your holiday shopping with the gift card. For holiday travelers, now is a good time to redeem for airfare and hotel rewards.
6. Just Say No
The holidays do not have to be a reason to spend money you don’t have. Talk to relatives and agree either not to exchange gifts or draw names so that each person only buys one. Alternatively, you could refuse to celebrate the holidays by racing around looking for gifts at crazy prices that your relatives and friends probably don’t need in the first place.
With the right approach to the holidays, you can save money and avoid debt. Come January, you won’t have any bills to fear.
This insightful article was culled from Rob Berger, an attorney and founder of the popular personal finance and investing blog doughroller.net. He is also the editor of the Dough Roller Weekly Newsletter, a free newsletter covering all aspects of personal finance and investing.