How to Avoid Getting Into Debt this Holiday Season

money-548948_1280Christmas will be here before you know it. We’ve shared ways to shop smart for the holidays and how to save, but you can still go into debt by mismanaging your money and overspending during this time of year.

It can be tempting to splurge during the holiday season, especially after several months of budgeting well and keeping your finances under control. Holiday ads prompt consumers to spend more and ‘treat themselves’ to new things that they may or may not be able to afford.

It’s important to realize that very few things are worth going into debt over during the holidays. Here are three ways to avoid going into debt this holiday season.

Beat the Rush

Get your shopping done early so you can beat the rush and be able to relax and enjoy the rest of the season to the fullest. Last minute shopping can be hectic and it’s easily avoidable. If you procrastinate on getting gifts each year, start making your list now and knocking some items out early before stores run out.

There are many great pre-season sales along with Black Friday and Cyber Monday deals to take advantage of. If you decide to shop too late, you might miss out on some of these affordable deals or feel pressured to purchase something that exceeds your budget just for the sake of not being empty handed when it’s time to exchange gifts.

Make Gifts for Others

If you can’t afford to spend too much this year, consider making a few gifts or offering to help someone else out as an alternative. There are plenty of DIY gift ideas floating around on Pinterest. Homemade gifts are more personal and can be customized easily. Plus, it’s more affordable to make something that the recipient can truly cherish and hold on to long-term. You can paint, sew or build something. Or you can make jewelry, decorations, photo albums or a scrapbook.

If you aren’t super crafty, you can cook a meal or holiday treat for someone of offer to help them out with something. If you have a special talent or skill, you can always offer your time and expertise as opposed to purchasing a gift.

Put Your Credit Card Away and Use Cash

The best way to avoid getting into debt this holiday season is to leave your credit card at home and pay for everything in cash. You can’t spend money that you don’t have if you use only cash. Use the envelope method by dividing up your holiday spending categories and placing the money for each category in a designated envelope.

Once you reach your spending limit or when the envelope is empty, you won’t have any way to spend anything else or in other words, get into debt. Shopping without credit cards may also help you spend more mindfully and you’ll be glad you did in the future when you don’t have any post-holiday debt to worry about.

If you are thinking about shopping on Black Friday, you can find out everything you need to know at The Penny Hoarder.

How are you planning to stay out of debt this holiday season? Which one of these strategies works best for you?

Posted in: Credit and Debt, Money

Top of page