Avoid The Holiday Debt Hangover

The holiday season is fast approaching and with it comes additional family commitments, socials expectations, gift-giving choices, holiday festivities and school events. Planning for the holiday season should start as early as possible so you can avoid unplanned spending and the unwanted stress that comes with post-holiday debt. 

Here are some tips to keep holiday spending on track.

• Make a list. Even though you may feel compelled to splurge on everyone in your life, you don’t need to. If you are hosting a large family dinner, perhaps you can consider that event – and all the money and time going into it – to be your gift to your guests.
• Set a budget. Figure out a realistic amount you can afford to spend over the holiday season and don’t allow yourself to spend beyond that number.  Remember to include not only gifts, but cards, decorations, parties and food.  
• Save. Once your budget is in place, break down how much you need to set aside each month in order to afford your holiday purchases. This reduces the burden of having to do it all at once. 
• Shop early. If you have your shopping list prepared well in advance, watch for sales on specific items. This spreads out your spending and you won’t end up buying everything in a short period of time, only to bear that financial burden in the New Year.
• Pay cash or keep credit cards paid in full. Using cash will force you to stay on track with your budget. If you choose to use credit and don’t pay it off in full, keep in mind that the interest on that purchase will increase the amount you spent on that gift. 
• Track your spending. There are numerous smartphone apps to assist you with keeping tabs on how much you spend, but don’t worry, if you don’t have a smartphone, a pen and paper will work just fine. Another idea is to keep all holiday shopping receipts in an envelope with a running total on the front. 
• Watch stocking stuffers. These items often add up at the last minute. Be creative and limit the stockings (if you do them at all) to inexpensive items or a set overall budget. 

By sticking to a few spending principles, you can keep your holiday spending to a minimum and avoid financial stress over the holiday season. High levels of stress can make it harder to make good decisions and can lead to unplanned spending or increased debt. Avoid this cycle altogether by having a plan, monitoring your spending and staying under budget. Come 2015, you’ll feel much more at ease without the burden of unmanageable credit card debt.