Look back at the start of this year and ask yourself if your holiday shopping put you in debt or not. If it did not, then good for you. Just keep doing what you did before. Make a couple of improvement if you must.
However, if you can honestly admit that the last holiday put you in some form of debt, then you need to make time to read this article. Because if you want to keep from piling up debt during your holiday shopping, you might want to start thinking about that season right now. After all, September has just begun. Soon, December is already upon you and without proper planning, you will find yourself rushing to do everything that you thought to postpone.
According to CreditCards.com, credit card balances leaped in December 2013 – more than ever compared to the past holiday seasons. During this season, the growth in consumer spending is expected to grow – but should we do it using credit cards?
Maybe it is okay but only if you planned it really well.
The article on the website revealed that although the debt is high, the default rate was not. That means people used their credit cards but was able to pay off the balance immediately – or at least they did not have problems making the payments.
If you think that these people who paid through credit did not plan their holiday spending, then you are mistaken. They did make some plans and the earlier you start with your plans, the less of a burden the holiday debt will be. You do not have to stress about the holiday shopping that you have to go through and the money that you have to spend on it. You might actually enjoy the holidays – if you start moving now.
Avoiding debt during the holidays require planning
There are three important aspects about the holiday that you need to plan. They will vary depending on your family’s traditions but these are the usual things that you need to prepare for.
The holiday season is a time of gift giving. This is probably where the bulk of your planning will focus on. If you kept your gift recipient list last year, you may want to bring that list out and review it. You will be basing your new list on this one.
Check which of the people in your list should remain and who among them you will remove. You may want to check if there are other names that you need to add to the list. If you transferred to another company, that would mean a new set of colleagues to give gifts to.
Of course, you need to plan what you will give to your family – especially your kids. According to a survey done by LexingtonLaw.com, 57% of their respondents who were parents said that they will take on credit card debt just to give their kids gifts for the holidays. Not only that, households with an average income of $35,000 said that they are willing to take on up to $700 debt if it means their kids will be happy. Surprisingly, the household with $75,000 in income will only agree to put themselves in $300 worth of debts for the same reason.
Bottom line is, gift giving is an important part of this season and everyone is expected to spend a lot of money on it. If this is something that you know beforehand, why would you not save up for it? Why do you have to wait until the last minute and put yourself in danger of holiday debt when you do not have to?
The next big expense that you will spend on are your meals. Holiday meals are extra special because this is the time when you want to serve your family the best courses. And if you are used to inviting family and friends over, the more that you have to prepare for this.
What you can do is to plan your meals ahead and know where you can buy the best yet cheapest ingredients for whatever dish you want to make. You can choose to buy your ingredients in bulk so you get to pay less. Planning ahead will also allow you to see how you can save with every dish. That way, you can pay less on the food and still give your best on the table.
Lastly, if you are planning to go on a vacation, this definitely deserves early planning. First of all, booking early will allow you to avail of special rates. The holidays is the peak season. That means it is already more costly compared to vacationing in another time of the year. You want to make sure you get to book the early bird rates so you can get a special discount. Not only that, you have time to search out the best rates in town.
Apart from that, planning your vacation early means you can still save up for your pocket money. You don’t have to spend through your credit cards alone. You might want to save up on cash so you can enjoy your vacation without putting yourself through holiday debt. That should boost the enjoyment that you deserve while on vacation.
If you have to go out of town, you may want to visit a place where you have an accommodating relative or friend. This might help you save on board and lodging costs.
Tips to complete your holiday shopping without ending in debt
There are a couple of things that you can also do to help you stay away from holiday debt and most of what we have on this list are things that you can do now.
- Decide how much you will spend. First of all, find out how much you are capable of spending for the holidays. You can use the amount of money that you spent the previous year and add a bit for contingencies. There might be hidden holiday costs that you failed to consider.
- Find out how you can come up with the money. Next is to find out how you can save up for the funds that your holiday list will require from you. Will you cut back on spending or will you try to earn more money? The choice is yours.
- Choose your payment method wisely. Purchase in credit only if there are rewards and you can pay it back within the grace period. Otherwise, you may want to use cash instead. There are smart ways to use your credit cards so you can avoid holiday debt. Make sure you get this information before you decide to rely on your cards to pay for all your holiday needs.
- Practice how you can make homemade gifts. This is the best way for you to save on the biggest expense on your list – the gifts. The less you spend, the more people you can give gifts to. Since you started early, you can produce more for family and friends.
Holiday debt does not have to happen if you only prepare for it beforehand. Besides, planning for one of the best seasons of the year should be fun. Talk to your family about it. Making plans together will be more rewarding than you will ever expect.