Avoid holiday debt

8 tips to keep holiday spending on track

1. Set a budget for your holiday spending

Set a budget that you can afford and stick to it. It should include all the things you’ll spend money on over the holidays, such as gifts, cards, decorations, parties and food. Use this holiday budget worksheet as a guide.

2. Save before you shop

Save a little bit for the holidays each month. That way you’ll be spending cash you already have on hand. If you choose to use a credit card, you’ll have the cash to pay it off right away.

3. Make a list

If you shop with a list, you’ll be far less likely to buy on impulse. That means you’ll also be more likely to stick to your budget.

Before you shop:

  • List the people you plan to buy gifts for.
  • Think about their interests and the kind of gifts they would like.
  • Estimate the cost of each item on your list. You may be able to do some comparison shopping online.
  • Check that the cost of each gift fits your budget.

4. Pay cash, or pay credit cards in full

Paying cash for everything can be a way to help you stick to your budget. If you choose to use a credit card, pay it off in full and on time to avoid interest charges.

5. Keep track of what you spend

Keep a record of what you’ve spent and what you’ve bought, and compare it to the list you created. If you start shopping early, it can be easy to lose track over several weeks or months. Try putting all your shopping receipts in a single envelope. As you shop, add the amount of each new purchase onto your total.

6. Shop early

If you shop at the last minute, stores may be out of the items on your list, and you may be more likely to buy on impulse. You’ll also have less time to shop around for the best deal. If you shop online, you’ll pay higher shipping fees if you wait until the last minute to order.

7. Look for sales and other discounts throughout the year

Watch for sales throughout the year to spread out the cost of gift-giving. Sign up for e-mail or even text-message promotions from the retailers you are most likely to buy from. Also sign up for or check the balances you have on rewards programs offered by debit and credit cards. You may be able to get a free gift or a discountDiscount When something sells for less than its normal price.+ read full definition. If you shop throughout the year, resist the temptation to buy additional gifts during the holidays that aren’t on your list.

8. Look for ways to reduce your travel costs

There are 2 ways you can try to cut your travel costs for the holiday season:

  1. Buy your tickets early, at least by October.​
  2. Wait until the last minute. Some travel websites have last-minute sections that offer huge discounts on travel packages. You must be flexible on your dates, though, and there’s a chance no travel packages will be available.

Take action

Find out how long it could take to pay off your credit cards and other holiday debtDebt Money that you have borrowed. You must repay the loan, with interest, by a set date.+ read full definition with this calculator.

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