5 Ways to Avoid the Holiday Debt Trap

The holiday season is upon us and with it comes holiday shopping expenses. While giving gifts to friends and family is all part of holiday tradition, overspending during this time of year can lead to financial consequences that come back to haunt us early in the New Year.

Taking a few moments to sit down and make a plan for holiday spending can save you some serious cash in the long run. Here are a few helpful reminders and tips to get you started:

  • No one wants you to go into debt. You, above all else, want to avoid this – but the friends and family members you’re shopping for? This is the last thing they want to happen when you’re purchasing a gift for them, too. Keep this top of mind to rationalize your purchases and stay within your budget.
  • Budget – and stick to it! It’s one thing to make a budget for yourself, it’s another thing to stick to it. Be firm when setting your holiday budget, but remember to find a middleground. Set your budget too low and you’ll feel guilty if you go over it. Set it too high and you might overspend.
  • Wish lists required. One helpful tip for holiday spending among families is to institute wish lists and divvy up expenses between family members. Spending limits can also be established to ensure no one goes overboard. Bonus: wish lists are a great way to plan ahead, too!
  • Forgo the credit card. Purchasing holiday gifts with your credit card can quickly rack up debt. This year, forgo the credit card and use cash or your debit card when possible. Not only will your credit card bill actually be manageable come January, you also won’t pay any interest down the line.
  • Do your research. When you finally know what to get for your loved ones this year, do your research and shop around. One product might go for full price on a manufacturer’s site or in-store, but do some digging and another retailer might have the same product for much less.

Keep these things in mind to avoid the holiday debt trap that so many fall into every year. Shop smart, reduce or eliminate your credit card spending, and stick to that budget!

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