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Strategies to avoid holiday debt

Strategies to avoid holiday debt

November 21, 2020
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How much will you spend over the holidays? It may be more than you anticipate. Consumers surveyed reported an average of $1,325 in new credit card debt following the 2019 holiday season, with 57% saying they hadn’t budgeted for the extra spending.1 The following tips can help you put a plan in place now to curb unanticipated spending and avoid adding new debt this holiday season:

  • Create a holiday spending budget based on what you can afford. Keep in mind that art from the kids, baked items from your kitchen and memory books can be a great way to be thoughtful and economical.
  • Begin setting money aside now in a designated holiday savings account. This is something you can start immediately after Christmas to keep you on track for the following year. 
  • Shop early to avoid overspending on last-minute gifts or shipping charges. If you know what you are looking for, you can look for sales on those items and not get distracted by other options. 
    • Signing up for store emails can get you direct to the discounts you are looking for on items you know you need and want.
  • Plan how much you will spend and then determine how you will divide it up among the people you are gifting. There are many amazing apps available to help you plan, track and check off Christmas gifts. Tracking helps you to avoid overspending. 
    • Check out Christmas Gift list tracker, The Christmas Gift List and Christmas List in the Apple App store to see if any of them match your needs.
  • Talk to friends and family members about setting dollar limits on gifts. They may be as relieved as you to keep spending within reason. It might even be worth asking if everyone is interested in putting their name in a secret Santa exchange so you only have to buy a gift for one person. 
  • Get creative. Instead of exchanging gifts, give the gift of time spent together to create memories that last. You could also agree to donate gifts to children in need or sponsor a local family in lieu of a gift exchange with friends. 
  • Plan your Christmas Traditions. Everything that has a cost should get a line item in your Christmas budget. Planning on driving through lights displays, taking a train to the North Pole, visiting Santa at a museum? Each of these events have an associated cost and should be planned for as a part of your holiday savings account. These can get out of hand just as easily as gifting, as there are so many options available during the holiday season. 

To learn more about financial management strategies that can help you remain on track toward your goals, reach out today to discuss our Total Advisory Program. 

1 Holiday Debt Survey, 2019.

This communication is designed to provide accurate and authoritative information on the subjects covered. It is not, however, intended to provide specific legal, tax, or other professional advice. For specific professional assistance, the services of an appropriate professional should be sought.