Saturday, December 01, 2007

Avoiding Christmas Debt

Avoiding Christmas Debt - Tips To Avoid Sinking Into Holiday Debt

Do you set a budget for your holiday spending? Unfortunately it is easy to over do it during the holidays in many ways. Weather it is eating too much stuffing or drinking too much eggnog is one thing. Buying too many gifts on your credit cards is another. Did you start that Christmas club savings fund to help out in paying for you Christmas bills?

It is easy to get carried away with Christmas debt. However, with some self-discipline you can help keep your purchases to a manageable limit. The key to success it setting a limit to your Holiday Credit Card Purchases. Credit cards are only an illusion that can buy more gifts than you actually can afford. Here's why you should limit your credit cards purchases this holiday season. Gifts bought on credit end up costing more.
The best laid plans.... Unexpected post-holiday expenses might postpone your credit card payment plan, lengthening your credit card debt. By sticking to a few spending principles, you can keep your holiday spending to a minimum and avoid paying for holiday gifts until the next holiday season.

How To Avoid Christmas Debt

When you've made the decision to keep your credit card purchases within a reasonable limit, here's how to put it into practice.

  1. Save up. Spending cash instead of using credit for your holiday purchases allows you to avoid holiday debt all together. If you haven’t started saving, put aside something each paycheck starting now and use that to finance your holiday purchases.

  2. Set a budget before you shop. Setting a spending limit and sticking to it will keep you from overspending. Be disciplined and don’t go over your budget, no matter what.

  3. Make a list. Santa makes a list and checks it twice, so should you. Even though you might feel compelled to splurge on everyone in your life, you don't have to. People appreciate simple and meaningful over expensive and useless.

  4. Don't shop for yourself. Avoid the "one for you, one for me" shopping mindset. You'll end up spending double what you would had you shopped only for the loved ones in your life.
    Ignore "big" sales. More often than not, they're not really sales at all. Those "Buy 2, Get 1 Half Off" deals only trick you into buying more than you would otherwise. Remember, stick to your list.

  5. Shop online first. The internet makes it easy to shop around. It also makes it harder to buy on impulse. Since most retailers have inventory on their websites, you can decide exactly what you want to buy before going to the mall.

  6. Leave your credit cards at home. Without your credit cards, you’ll have a hard time charging them up. If you must use credit for your purchases, pick one credit card and stick to your spending budget.

  7. Don’t buy if you can’t afford to pay. Keep in mind that when you use credit, you’re borrowing from your future income. You know your finances better than anyone. Only charge what you can afford and you’ll avoid paying on your holiday debt until the next holiday season.

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