Tips For Avoiding Consumer Debt Over the Holidays

Holidays are meant to be joyous occasions full of togetherness for friends and family.  However, holidays have also become synonymous with consumerism and marketing ploys are amped up to try to put your spending habits on overdrive. The holidays create an environment where extreme pressure is placed on the average citizen to spend well above their means and give the newest and best gifts to everyone on their family tree and neighborhood block. This pressure causes a lot of Americans to turn to credit cards when purchasing presents for their family and friends–spending money they don’t have.

Financing the holidays in this manner can lead to overwhelming credit card bills that take a long time to pay off–creating lasting memories of the holiday, but certainly not in a good way! Instead of getting yourself into consumer debt this holiday season, follow these simple steps:

1. Set the credit cards aside. When you bring your credit cards on shopping trips it can be extremely tempting to whip them out for purchases you hadn’t planned or gifts you can’t afford. When you’re venturing out to tackle holiday shopping leave the credit cards at home in a safe place.

2. Shop online. Often, websites like Amazon have far better deals than brick and mortar department stores. When you get an idea for a present, click around and see if there are any great deals online. When making a purchase use your debit card.

3. Stick to a budget. Check your finances and determine how much you can afford to spend per person on your shopping list. Plan your gifts around these numbers and don’t stray just because you find something you know they’ll love but  YOU can’t afford.

4. Buy presents with cash. Once you’ve established a budget, a great way to make sure you don’t go over is to take that money out in cash. You don’t need to do this all at once, but keep track! Once you’ve spent your allotted present-purchasing funds, the shopping is over.

5. Get crafty. Capitalize on your skills! Are you a great knitter, fabulous baker or craft extraordinaire? Buying supplies in bulk and making friends and family one of a kind gifts from scratch is a wonderful way to save money. They’re sure to appreciate gifts made especially for them more than a store bought doodad they could purchase themselves.

6. Save early. The most effective tip for avoiding holiday debt is prior planning. Set up a way to save money for the holidays all year round. Whether this is a special savings account or a shoe box in your closet, putting away $10-$50 each paycheck will add up quickly! This will also allow you to pull from these funds if you find a good deal  on a potential present at any point in the year (tuck it in the closet and give when appropriate–Aunt Jane will never know you purchased it in July!).

When the holidays sneak up on you it is easy to fall to the pressures of consumer debt but by keeping an eye on your finances and planning appropriately you can stay debt free this holiday season!


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2 comments ↓

#1 Alexander Collins on 01.12.12 at 6:21 am

Better to cut your credit card with help of scissors.
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