Throughout the holiday season, it is important for us to do out best, to manage our time, manage our money, enjoy our friends and family, and give to those around us. However, like any other time of year, it’s also important to know how to budget wisely and prevent ourselves from building a pile of debt.
Minimizing debt throughout the year is always a good idea, but as the holidays approach, it can become an even better idea. If you want to make certain of how to stay out of debt this holiday season, there are several things to keep in mind. After all, with the holidays approaching, there are plenty of ways to spend too much money. Here are some tips on how to stay out of debt this holiday season.
How To Stay Out of Debt This Holiday Season
If you want to know how to stay out of debt this holiday season, the first thing to have in mind is to have a pre-set budget for all of your gifts and spending related to any holiday parties that you may be throwing yourself – you must have a predefined spending limit!
It makes sense that if you have a firm limit heading in, then you will have a much better chance of not exceeding it. Without a clearly defined spending limit, how can we possibly know whether we’re spending too much and potentially getting ourselves into trouble?
Therefore, avoid the typical response of creating a list of people to whom you wish to give gifts and instead start with a number – the maximum amount that you can afford to spend on all gifts, cards, food, drinks, party supplies and decorations before beginning your shopping. Once you have a pre-set spending limit in mind, stick to it!
Being smart about staying out of debt during the holiday season also includes giving yourself plenty of time for shopping and bargain hunting. For the most part, rely on cash as much as possible – especially given that the overall objective is to remain within the bounds of your spending limit. Exceptions can be made when you have existing points or cash back dollars sitting on credit cards that can be allotted toward holiday spending.
While we’re on the subject, you can also look to use any spare amounts you may have remaining on gift cards for holiday shopping. Apart from these examples, relying on cash (your budgeted amount, withdrawn from your bank ahead of time) serves as a preventative against relying on credit cards while also strictly avoiding potential impulse purchases that can tip you over your spending limit.
When you plan ahead like this, you also avoid the need for last-minute purchases that can prove overly expensive. Remember too, that in those instances when using a card makes some sense (for cash back or promotions) that you use the lowest interest-rate card possible, remain within your pre-set spending limit, maintain a written record of all purchases, and create a written plan for exactly when you will pay back all charges in full. Writing everything down and keeping yourself accountable as we head into 2022 is the best answer to the question of how to pay off holiday debt.
Debt Free Holiday Season
Another way to ensure a debt free holiday season is to substitute some of your time for your money when planning your gift giving. The expression, “it’s the thought that counts” really comes into play here. Meaningful gifts don’t have to cost a lot of money – yet they can be among the most treasured and remembered.
For many older people who have fewer material wants, thoughtful gestures and meaningful gifts can really make a difference. Simple handwritten creations combined with thoughtfully selected trinkets from thrift shops and garage sales can mean the world to an older person when you’ve shown them that you know who they are on the inside.
Doing something as simple as giving a photo from earlier in the year presented in a nice, inexpensive frame helps fortify a friendship. How about a “gift certificate” for a babysitting night – or a weekend of dog walks?
What about offering to help an older person with their food shopping, or even better – a lunch outing? Or simply plan to spend a day with a friend or loved one who you haven’t really seen in awhile if the two of you live nearby. All of these (and others that you can think of yourself) can really hit home in a good way while maintaining your spending below your pre-set limit.
Stay Out of Debt This Holiday Season
A few final thoughts as we plan ahead in our efforts to stay out of debt this holiday season. If you’ve never done it before, consider trying a “Secret Santa” this year with your family or a group of friends.
This way, everybody winds up getting a gift and nobody has to buy gifts for everyone – an easy way for everyone to participate while saving money and staying out of debt.
Next, when it comes to Black Friday (and Cyber Monday), you’re far more likely to come out ahead when you plan in advance exactly what you’re going to buy at a discount – and nothing more! In other words, we’re not going to act like kids in a candy store who need to get everything that they want.
No. Instead, we can use these shopping holidays to save money and time while keeping ourselves reigned in from impulse purchases. Remember your pre-set spending limit – because it’s on these particular days when you will need it most!
About the Author: Steven Brachman
Steven Brachman is the lead content provider for UnitedSettlement.com. A graduate of the University of Michigan with a B.A. in Economics, Steven spent several years as a registered representative in the securities industry before moving on to equity research and trading. He is also an experienced test-prep professional and admissions consultant to aspiring graduate business school students. In his spare time, Steven enjoys writing, reading, travel, music and fantasy sports.
Gabriel Gorelik paves the way for customer service and operations at United Settlement. He is passionate about numbers and holds a strong belief in helping anyone with their debt. Before United Settlement, Gabriel received his BS in Finance & Economics from Brooklyn College. After graduation, Gabriel went on to build his first financial services company where he managed thousands of accounts for business and consumer clients. He understands the importance of client satisfaction, professionalism, and exceeding expectations.