Limiting your holiday debt this season

With the holiday season fast approaching, it’s easy to get wrapped up in the excitement of buying gifts, decorating the home, and enjoying the variety of celebrations. However, all of this also often leads to overspending. This is the busiest time of year for shoppers, and it doesn’t take much effort at all to start spending money. Once the holidays are over and the bills start rolling in, however, many people find themselves stressing over the results of their holiday binge. Your best course of action is to avoid holiday debt altogether! Here are some tips to help you keep your finances in check this season.

Set a budget and stick to it

Making a holiday budget is a simple and effective way to keep your spending under control. A budget helps you ensure you are spending wisely, which will add more cheer to your festive spirits when you don’t have to deal with debt. You can start by determining an overall spending limit, then breaking that down into separate categories such as gifts, decorating, food, etc. The tricky part can be sticking to these limits, but it’s important to hold yourself accountable! Bring out all of your existing decorations before you buy anything new, and make sure any new purchases are actually worthwhile and not just for the sake of buying something. When it comes to gifts, decide on price limits with the people you are exchanging presents with. This will help you spend less while still feeling comfortable with the amount you are spending on others.

Purchase with purpose

One of the easiest ways to overspend and accumulate holiday debt is by wandering through shops and malls without a specific plan. When you aren’t sure what you’re looking for, you are much more likely to buy items you don’t need, don’t truly want, or cannot afford. This is true whether you are buying gifts, groceries, decorations, or anything else this time of year. Stores are full of fun items with big price tags, and if you don’t know exactly what you’re looking for, you might end up falling victim to them! Prepare ahead of time by making a list of what you need to buy, and only go into the necessary stores to find those items. This will help you save time, money, and stress!

Avoid new credit

This is the busiest time of year for businesses, and they will do their best to capitalize on the holiday rush. It’s very common to see stores offering their own credit cards or paid accounts during the holiday season, often with a promotion involved to tempt shoppers into signing up. However, the initial discount you might receive will likely not be worth the long-term financial commitment of annual fees or high interest rates. You will probably find yourself owing more money than you were able to save. Plus, many people will spend more money simply because they have new credit and feel like they can. This will come back to hurt you once those bills start coming in! Steer clear of adding onto your credit this season so you aren’t carrying holiday debt with you into 2025.

Be careful with offers and deals

It’s very common to see stores offering all kinds of deals and promotions this time of year. Expensive items might suddenly be 30 per cent off for a limited time, or you might find yourself tempted by a “buy two, get one free” deal. However, stop and take a moment to think about these purchases before you go through with them. Stores offer these kinds of “deals” in the hopes of making shoppers spend more money than they originally planned. For example, if you didn’t intend on buying a pricey coffee maker at all, but you see a high-quality product on sale, you will be more likely to buy it. It might seem like a good deal, but you just spent money on an item you never planned on buying in the first place! If you see products on sale that you actually need, then you have found yourself a great deal. Otherwise, just walk on by!

Pay with cash and debit

This is a simple trick that can work wonders for shoppers. When you use cash or debit cards to make purchases, you are spending money you already have, and you can see it leave your hand or bank account immediately. This has a bigger impact than credit cards, which can sometimes feel like free money. When you spend your own funds, the purchase somehow feels more real, which can help you limit your spending. Relying on credit cards can make you push the thought of money to the back of your mind as an issue you will deal with later. However, “later” always arrives, and if you’re not careful it can bring a big amount of holiday debt with it! Whenever possible, we recommend using your own existing money for your purchases this season.

The holidays should be a time of celebration and joy, not of financial stress! Being mindful of your spending and smart with your shopping plans will help you limit your holiday debt and keep the season merry. Plus, if you’re looking to purchase a home, maintaining healthy finances is essential. Be sure to reach out to your mortgage broker so you can enter 2025 ready to find the perfect mortgage product for your needs.

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.