5 tips to steer clear of holiday debt

Are you worried about holiday debt? This time of year is huge for spending, and for some people this can quickly lead to overspending. While it might seem impossible to avoid unnecessary purchases this season, it’s quite doable! Here are some tips to help you stay away from debt in December, so you can enjoy the holidays.

Decide on a budget for gifts

Gift-giving is fun, and we often get a little thrill when we find the perfect present for somebody. However, this makes it all too easy to overspend in order to track down the “right” gift. If you exchange gifts with friends or family, the costs of these purchases quickly add up. What can start with an extra five dollar expense can snowball into a $100 purchase you didn’t intend to make. 

You don’t want to sink into holiday debt just from buying presents for loved ones. If you can decide on a gift-giving budget with the people you are buying for, this will help you control your spending. It will also ensure everyone is spending the same amount on each other, which can sometimes be tricky if there is no clear budget. You can also consider doing a secret Santa gift exchange instead of purchasing something for everyone. This is the best way to maintain your savings while still participating in the season.

Avoid unnecessary holiday “deals”

All throughout December, you will see every store offering major holiday deals, just in time for Christmas when people are doing their shopping. On the surface, many of these deals look like amazing finds. However, for the most part, these offerings are requiring you to spend unnecessary money. For example, a buy one, get one half off deal isn’t worth it if you don’t need that item in the first place. Try to only participate in these deals when you truly need to make the purchase. Ask yourself if you would still have to buy a particular item even if it were not on sale. If the answer is yes, then you have found yourself a nice deal! If the answer is no, it’s best to move on.

Use cash when possible

This is an old trick, but one that truly works well for those on a budget. Avoiding holiday debt is much easier when you are only spending money you have on-hand. Using credit cards makes it simple to make endless purchases, but this comes back to bite you when it’s time to pay those bills. Similarly, using debit cards can still feel like you are spending free money, even when it comes out of your account right away. For a lot of us, spending money only becomes truly meaningful when we are handing over physical bills. If this is the case, it’s a good idea to take out some cash before you do your shopping. Only carry the amount you think you will need so you can spend wisely and stop at the right time.

Buy in-person

While online shopping is so convenient and accessible, it can also lead to holiday debt pretty easily. Switching from site to site and adding items to a virtual cart is just too simple, which can be a danger for those who tend to overspend. If you can, try to do your shopping in-person. This requires you to go from store to store to find the items you want. It also means you have to physically track down what you want to purchase, which is harder than searching for it online. These are small deterrents, but they help people think twice before committing to buying something. Of course, for some people, buying in-person isn’t a realistic option, whether due to accessibility or location. However, if this is something you can try, we definitely recommend it!

Turn down new credit

Finally, and perhaps most importantly, you must be aware of opportunities to take on new credit. Many businesses have their own credit cards, and December is a popular time for companies to try to sell these hard. The promise of extra savings and deals can be tempting, but we recommend just sticking with your current credit situation. Adding a new credit card or increasing your credit limit will inevitably lead to higher spending. If you are trying to avoid debt and keep your savings high, this isn’t a good path to take. Just say no to these offerings and continue on!

Holiday debt is easy to run into, but it can be tricky to escape once you’re caught in it. The good news is you can likely avoid holiday debt with some preventative measures and discipline. If you’re at all concerned about the possibility of debt this season, we recommend reaching out to a mortgage broker! We can chat with you to ensure you have a plan in place to keep your financial situation intact.

If you have any questions about your mortgage, get in touch with us at Clinton Wilkins Mortgage Team! You can call us at (902) 482-2770 or contact us here.