The holiday season is a time for creating meaningful memories. However, one memory you’d probably prefer to avoid is the one where you realize you overspent on gifts, parties, decorations, and other expenses when you receive your credit card bills. To prevent starting the new year with a fresh dose of debt, we have some helpful tips to ensure you don’t overspend this holiday season.
4 Tips for Avoiding Debt During the Holidays
Look at these tips to avoid being burdened with paying off your 2022 purchases well into the future, even once the year has ended. It can be tempting to overspend during the season, but following these recommendations can help you avoid that trap.
1. Follow the Four-Gift Rule
You can follow the four-gift rule to avoid buying too many gifts and spending too much money. This means getting each person on your list just four types of gifts, with a set budget, instead of overwhelming them with a lot of presents. The rule is easy to remember since it rhymes:
- Something they want
- Something they need
- Something to wear
- Something to read
2. Find Toys for Under $25
Shopping for the smallest children can often cause a lot of stress when it comes to gift-giving. It’s natural to want to give them the best and trendiest toys available, but sometimes spending over $100 on a single gift per child can result in long-term debt.
3. Avoid Boredom Buying
Even if you don’t have a long shopping list, during the holidays, it’s easy to get carried away while browsing online stores out of boredom. Before you know it, several hours have passed, and you’ve spent a significant amount of money on items you may not have planned on buying, such as closet organizers.
Retail therapy is when you shop to make yourself happy or avoid feeling bored. However, the happiness you feel after finding a good deal on a purchase may not last long once you receive your credit card bill the following month.
4. Stick to a Holiday Budget
If you’re a last-minute shopper for this holiday season, don’t worry because you can still set your spending limits. Before deciding on your expenses, it is crucial to determine your budget and figure out how much money you can afford to spend.
By dedicating an hour to review your finances and create a budget for the holidays, you can enjoy the holiday season without worrying about money and continue to save some cash in the new year. Whether you opt for a particular holiday budgeting technique or not, having all the necessary information on hand will enable you to adhere to your spending limits and avoid making unplanned purchases. Finishing the holiday season without incurring extra debt is an excellent way to begin the new year on a happy note.