The holidays are coming! Here’s how to reduce your debt
Happy (almost) holidays! The festive season is just around the corner, and for some people it has already begun. For many of us, this means we have reached the time of year where we spend the most, and our budgets tend to fall by the wayside. While it can be fun to splurge and purchase the best gifts and decorations, this can also hurt you once the holidays are over and the bills start rolling in. Why not get ahead of the game and take some steps to protect yourself from debt? A bit of preparation goes a long way this time of year! Here are some tips to help reduce your debt this season.
Decide on a budget ahead of time
It’s easy to get wrapped up in the festive fun of the holidays, and budgeting may not seem like a very merry task. However, taking the time to create a budget now will allow you to enjoy the holidays guilt-free, and not stress about any future bills. You will most likely spend more money in December than any other month of the year, and that’s okay! The key is making sure you are still spending within a range you can afford. Think about the types of expenses you have this time of year. Gifts, decorations, events, and food are likely all major players. Take some time to decide on a budget for each of these categories, and do your best to stick to it. For example, you might want to set up a $50 limit for gift exchanges with family and friends. You may want to allocate $200 to purchasing new decorations, and commit to using items you already have. Your budget will depend on your own financial situation. Make it your own, and make sure it is accurate!
Create lists of future purchases
Once you know how much you plan to spend, you should make a list of the specific items you want to purchase. When you go into a store knowing exactly what you need, you are less likely to wander and spend more than you intend. If you don’t know what you are looking for, odds are good you will spend more than you budgeted for yourself, and you might even buy items completely unrelated to the original purpose of your trip. If you don’t like the idea of being so rigid with your shopping, especially when it comes to buying gifts, try to come up with a few ideas for potential items you can buy. This allows you to explore different options and have fun selecting the perfect gift, while ultimately still only buying what you need. The more detailed you are with what you need to buy, the more efficient you will be getting in and out of stores without overspending.
Keep track of what you spend
Even if you created a budget for yourself, it’s a good idea to keep track of how much you are actually spending. This is the only way you can hold yourself accountable and ensure your budget is accurate, and that it works for you. You can use an app, a spreadsheet, or good old pen and paper for this process, as long as you are keeping an accurate record of your spending. If you find you are overspending, try not to beat yourself up! It can be hard to find the right budget, but catching this early means you can adjust as needed. After all, having a budget is pointless if you can’t be sure you are following it! By taking responsibility for enforcing your own budget, you are protecting yourself and your finances.
Avoid using credit
Another simple way to reduce your debt this season is to avoid using your credit cards when possible. Shopping with credit cards often feels like spending without consequences, which can lead to overindulging and major expenses. If you can, we recommend using cash or debit cards to make your purchases. Of course, these payment methods take your money immediately, which is beneficial for a couple of reasons. First, it ensures you aren’t spending more than you can pay back. Second, watching your money disappear in real-time often helps people spend within their means. This is a small step that can save you a large amount of money!
When the holidays are upon us, it can be hard to reduce your debt and prevent it from piling up. However, planning ahead can really help you stay within your means and enjoy this season to its full potential. Being responsible and strategic with your finances will pay off! We hope you enjoy the start of the festive season, and can take advantage of all it has to offer.
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