Helping you get through the holiday shopping season without debt.
Estimates show that the average household is set to spend almost $1,000 this year during the holiday shopping season. If you’re concerned about credit card debt, Consolidated Credit’s holiday survival guide can help you have a debt free holiday.
A Penny Wise, Pound Foolish guide to surviving the holidays.
Penny Wise knows the best time of year can also be the worst for you budget. You have to plan carefully to avoid holiday debt. Only the Pound Foolish think it’s pointless to plan.
Follow these 7 tips to survive the holidays with less stress and debt.
First, make a budget and stick to it. Pound Foolish shops without a budget and ends up spending way too much. But Penny Wise budgets for everything from gifts to family meals. And once the budget is set, don’t deviate.
Penny Wise also knows you shouldn’t buy gifts for everyone. Pound Foolish buys individual gifts for everyone and way too many gifts for family members. Coaches, teachers, neighbors, bosses, coworkers… it never ends.
Penny Wise makes a list of everyone they need to buy for and then prioritizes it. They set spending limits for family gifts and do things like gift swaps for adults. Then they make what they can for everyone else.
Penny Wise also gets the whole family involved, making gift baskets or baked goods. Or they grow potted plants and let the little ones decorate the pots. Just don’t be Pound Foolish and start too late or you won’t have time for mistakes. And Penny Wise makes sure to have extras on hand for last minute gifts.
Penny Wise also likes to play Secret Santa. So they shovel snow or rake leaves for a neighbor without them knowing and they do family member’s chores when they’re out of the house. They can also leave gifts on doorsteps. Because only Pound Foolish thinks the value of a gift is measured by the price tag.
Penny Wise also creates personal gift certificates, offering good deeds that celebrate the spirit of the season. You can offer freebies like car washes or babysitting services, or coupons for fun outings that can be redeemed later. So while Pound Foolish is still paying off the debt from last holiday season, Penny Wise is cashing in and enjoying more great times with the family.
You should also focus on experiences. While Pound Foolish is stressing out on a mad-dash shopping binge, Penny Wise is making new traditions with the family, like skating trips and bonfires, and volunteering together to help those in need.
Finally, Penny Wise never forgets what’s really important. Pound Foolish gets pulled in by ads that say you need diamonds and cars to express your love. While Penny Wise creates a blessing jar that the family fills with things they are thankful for. Then together they read the notes and celebrate the joys of the past year.
So remember the spirit of the season and celebrate this year without debt. And if you overspend, Consolidated Credit will be here to help soften the landing.
Additional holiday resources to help you save:
We also invite you to use the resources to help you avoid holiday debt:
- Holiday Shopping Tips Video
Go beyond gifts and learn to save on everything from food to shipping
- Gift Budgeting for Kids
Teaching your kids to stick to a budget helps them and keeps your spending on track
- Holiday Spending Checklist
Accurately assess what you need to buy and how much you can expect to spend
- Holiday Meal Planning
We offer 10 tips on how to plan a holiday feast that won’t break the bank
How to use credit correctly during the holidays
People use credit for a variety of reasons during the holidays. It’s convenient for online shopping and you can earn valuable rewards, such as cash back. What you don’t want to do is start charging because you ran out of money. If you’ve overspent, then you need to stop spending or you’re likely to face a debt hangover next year.
Still, if you decide to use credit cards during the holiday shopping season, follow these tips to keep debt minimized:
- Only use a rewards credit card to make purchases that can be paid off in a single billing cycle.
- If purchases will take longer than a single billing cycle to pay off, use a credit card with the lowest APR.
- Once the bills come in, prioritize payoff on any debt that has a high interest rate first. So you pay off the rewards credit card first, making a minimum payment on the other card.
- Put as much money as possible to reducing your debt.
- Once you have the first card paid off, move on to the next. Use as much money as you have available to make the largest payments possible.
- After you have all holiday debt paid off, divert some of the money you’ve been using for debt reduction to start setting aside money for next year.