“Holiday Hangover.” You may have heard the phrase in years past. It’s that anxious feeling you get when you’ve spent too much during the holidays. These simple steps will help you to avoid the struggle to pay off credit card debt after this holiday season. Instead you'll feel in charge and ready to face the upcoming New Year free of overwhelming debt.
1. Set A Spending Budget: As a family, review your monthly budget and decide how much you can actually afford to spend on holiday gifts without going into debt. Factor in all holiday expenses including such items as cards, postage, decorations and anything else that you will purchase using your credit card during the holidays. Don't spend more than you can pay back in one month.
2. Make a Complete List: Make a list of each and every person for whom you need or want to buy a gift. Be sure to include gifts for teachers, postal workers, co-workers, etc. The costs of these small gifts add up quickly and can cause you to exceed your gift budget if you don’t take them into account.
3. Set A Limit For Each Person: Decide how much you will spend on each person on your gift list, then add it all up to be sure you don't exceed your total holiday budget. Include money you'll spend on holiday cards, postage, wrapping paper, etc.
4. Determine Which Credit Card(s) You Will Use: First, decide how many cards you are going to use for the holiday season. Often, one card is enough and the use of multiple cards is an unnecessary temptation to overspend. Second, use a low interest credit card to avoid additional expense. Third, stay away from new store credit cards. They often have higher interest rates then regular credit cards. An instant savings of 10 percent on a first purchase may be tempting but if your purchase isn’t a really expensive one then a store credit card is a poor choice. Each time you apply for a store credit card, a new inquiry goes on your credit report. If you are approved, you will have even more credit available. Multiple inquiries and too much available credit reduces your credit score.
5. Don't Let Guilt Get You Off Track: Some people compensate for not spending quality time with family by overspending during the holidays. If you are feeling guilty about a particular relationship, work to repair the relationship rather than spending too much in search of a quick fix.
6. Do Not Touch Your Emergency Fund: Your emergency fund is for emergencies, not the holidays. An emergency is a “sudden, urgent, usually unexpected occurrence or occasion requiring immediate action.” The holidays do not qualify as an emergency because they happen every year.
7. Be Wary Of Last-Minute Shopping: Those last minute panic shopping sprees can ruin your budget. Plan ahead and give yourself plenty of time to shop.
8. Get Creative With Gifts: Try giving low or no-cost gifts such as washing the car, cleaning the garage or running errands. Most people also love to receive homemade cookies, cakes, or other treats. Take advantage of your cooking skills or other talents to make holiday gifts.
9. Stop Shopping When Your List Is Complete: As soon as you have purchased a gift for every person on your list, put your credit card away and stop shopping. Get your shopping completed then stay out of the malls until the holidays are over.
10. Start Saving Now For Next Year: This is the best step you can take to avoid credit card debt in coming years! Try joining a Christmas Club at your bank now to prepare for next year.
This year avoid overspending by planning ahead.
Happy Holidays!
By: CreditSearchPro.com
Please feel free to reproduce this article provided that the By Line is included as well.
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