Managing Debt During The Holidays

Giving On A Budget

First, write out a list of people who you are buying gifts for. You may find that your list is a little unreasonable or could be trimmed down. Arrange a gift exchange for your family or coworkers so that everyone is only responsible for one person. Draw names and give a more expensive gift to that one person. Get creative and try to find other, inexpensive gifts for additional people on your list or find a few people who might appreciate homemade gifts, like baked goods or craft items. You would be surprised how many neat ideas there are for gifts that can be made from a few, affordable items from the local craft store or farmers market.

Also, consider the fact that you still have two months to stock up cash for your gifts. Eliminate one of your luxury purchases and save that money to go towards your gift fund. Rather than splurging on Starbucks from now until Christmas, make coffee at home and keep that money in your bank account. Look online and in newspapers for coupons or discount days. Many stores are already running specials and holding sales, and shopping early can save you both money and time before the holiday rush. If you are considering an expensive purchase, ask the store about layaway. Why put that large purchase on your credit card when you can pay for in slowly in cash? It makes more financial sense to pay in cash, especially for expensive items, as putting them on your credit card is only going to cost you more in interest fees. Another place to shop is at resale or donation stores. Many gently used items can be found at Goodwill and second-hand stores; these are especially good for baby items, who will only outgrow a piece of clothing or toy in a matter of weeks.

Cautious Credit

If you truly cannot avoid using credit for purchases during the holiday season, don’t give up on these charges after the holidays. Make a plan to repay these debts as soon as possible. Continue to give up your luxury purchases for a few months into the New Year as you work towards reducing your credit card balances. A little bit of sacrifice will go a long way in keeping your debt accounts at a healthy level and prevent you from ending up in financial hardship.