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Avoiding Debt This Holiday Season
The holidays are headed our way again, and the excitement of trying to find the perfect gift for each of your loved ones is an annual holiday adventure. In spite of our best intentions, it can be easy to overextend ourselves to meet the demands of our own “ideal” holiday gifting plans.
The gift we should be giving ourselves this year is making it through the holidays without going into debt. We’re no experts at finding the perfect gift for everyone on your list, but we do have some experience with debt management.
Avoiding debt during the holidays is an admirable and prudent goal. Here are three effective strategies to help prevent holiday-induced debt:
- Prioritize Expenses. List out all potential expenses and prioritize them based on your needs and wants. Be ready to cut out non-essential expenses.
- Track Your Spending. Keep a close eye on your expenses as the holiday season progresses. Use apps or spreadsheets to monitor your spending in real-time.
- Adjust Budgets Early. If you notice that you are going over budget, make adjustments early to prevent further overspending.
Practice Thoughtful Gift-Giving
- Homemade Gifts. Consider making homemade gifts, which often hold more sentimental value and cost less.
- Gift Experiences. Gift experiences instead of material items. These can often be more meaningful and possibly less expensive.
- Set a Gift Budget. Before you start your holiday shopping, set a budget for each person on your list and stick to it.
Avoid Using Credit Cards Recklessly
- Limit Credit Card Use. Try to limit your credit card use to avoid accumulating debt. If you must use a card, use one with a low interest rate.
- Pay Balances in Full. If possible, pay off your credit card balances in full each month to avoid interest charges.
- Avoid Impulse Buying. Avoid the temptation to buy items that are not in your budget, even if they are on sale.
Implementing these strategies can help you navigate the holiday season without going into debt. It can still be a festive time without breaking your bank account, and you can start the year off without one of your resolutions being “This is the year I’m not going into debt during the holidays!”
Since we’re feeling festive here at Dolaghan Law, here’s a few extra tips. After all, Tis’ (almost) the season!
- Start Early. Begin your holiday preparations early to spread out the costs and avoid last-minute, often expensive, purchases.
- Sales and Discounts. Take advantage of sales and discounts, but only for items that you were already planning to purchase.
- Emergency Fund. Have an emergency fund in place to avoid going into debt for unexpected expenses during the holidays.