The holidays are the most popular time of year for retail shopping, and the most dangerous on your wallet. With holiday sales starting earlier each year, it is easy to overspend in the heat of the moment. Below are a few helpful tips to stay on budget and avoid overwhelming holiday debt in the new year.
- Set a budget. Knowing in advance how much you can spend can keep holiday shopping under control. Consider setting a budget for each person on your list to help you stay on track. Also, anticipate expenses such as travel, accommodations and food that can inflate spending. You might also set a limit to the number of presents you purchase for each person. Having a plan (and sticking to it) can help to avoid overspending.
- Hunt for deals. Between Black Friday, Cyber Monday and the numerous Door Buster Deals available through the new year, there are plenty of ways to save this holiday season. Study the sale ads and plan purchases around the best savings. Some of the best discounts are available after the holidays, so plan for next year whenever possible. A little extra savings can go a long way for your holiday budget.
- Avoid opening new cards for savings. In addition to sales, many retailers also offer additional discounts for opening a new credit card for their store. Avoid hits to your credit score and inflating debt by resisting the additional savings at the register. While they may be appealing at the time of purchase, these credit cards often carry hefty interest rates and fees. Instead, consider opting for a lower rate card option, like the Memorial Health Credit Union MasterCard® Credit Card for your shopping.
- Save in advance. Anticipating your budget in advance is much easier said than done. However, if possible, stashing extra cash throughout the year can help offset the shock of holiday spending. Try saving 10% of each deposit into your account throughout the year to get ahead of holiday debt. Consider opening a holiday savings account and scheduling an automatic transfer to make saving more convenient. By spreading out the costs throughout the year, you can avoid accumulating higher card balances during the holidays.
- Plan ahead. Knowing that the last two months of the year will likely be some of the most expensive, counter the cost by limiting spending in the weeks and months prior. Consider bringing a lunch versus eating out for the month of October, or postpone non-holiday shopping until after the new year. Making small adjustments to your daily spending habits can help build surplus funds to offset holiday spending.
The holidays are a time for being close with family and friends, not worrying about how you will pay off debt. Use these simple tricks to alleviate some of the stress and enjoy your holidays!