The holiday season is quite magical. For both young and old, this time of year holds so much joy. But for many, it also holds so much debt! Last year, Americans racked up an average of $1000 in holiday debt.
Here are some tips on how you can stay out of debt this year!
This post is sponsored by Lexington Law Firm, all opinions are my own.
Make a budget.
We’ve all heard the saying if you fail to plan, you plan to fail. Not making a budget for the holidays is a sure-fire way of making sure you overspend or worse, get into debt. If you’ve not done so yet, sit down and write out a budget. Here are some things, besides gifts, that you don’t want to forget. Often times, these areas are overlooked which results in people going into debt to purchase gifts.
Parties (appetizers, gift exchange,)
Tips (housekeeper, hair stylist, babysitter, gardener)
Toy Drive Gift
Stick to your budget.
This should go without saying, but I’ll go ahead and say it anyway. It does no good to make a budget if you aren’t going to stick to it. Here are some ways that you can be successful at sticking to your budget.
Be realistic both about your means and your shopping habits!
Set aside holiday cash in an envelope and only carry it when you are shopping.
If you are going to use a credit card, only carry that card when it’s time to shop.
Use credit cards wisely.
Although I do not personally use credit cards, I realize that some people like to use them because of the points. If you fall into this category then it is really important that you use your credit cards wisely, particularly if you want to stay out of debt. It is way too tempting to spend outside of your means when you have a credit card because you don’t “feel” it the way you do with spending cash. But you will feel it when your credit card statement comes and you end up still paying for Christmas six months later!
One way to use your card wisely and stay out of debt is to treat your card like cash. Meaning, don’t spend it if you don’t have it - just as you would do with your bank card or $100 in your pocket.
Again, it can be really easy to overspend when the money is not actually being withdrawn from an account or cash envelope. So, one way to make sure you spend within your means even with a credit card is to go ahead and withdraw the money as you spend it. Or make two cash envelopes one for holiday spending and one for your credit card. Take money out of your holiday spending envelope when you make a purchase and put it into your credit card envelope.
I know, I know, it seems like a lot of work but keeping yourself out of debt is well worth the effort. But, don’t worry if your credit needs to be repaired, you don't have to do it alone. Lexington Law is available to help you