The Holiday season is upon us once again. It’s the season to get together with friends and family and eat just a little too much. But, what the heck, it’s Christmas. Unfortunately, it can also be a very stressful time as we spend money we can’t always afford gifts for everyone.
The National Retail Federation says that the average American plans to spend an average of $1,048 this year. That’s a lot of money, especially with so many people living paycheck to paycheck. So, before you get too far down the road of credit card destruction, here are some self-preservation tips.
The most important step is to set a budget. That doesn’t sound like a lot of fun, I get it, but it will save so much pain and frustration in January that you’ll be really glad you thought this one through. Wouldn’t you rather buy a gift or take someone out for a Holiday meal knowing you have the expense planned for rather than enduring that gnawing feeling in your gut that you’re on the path to budget meltdown?
So, take some time and write down everyone you would like to do something special for and how much to spend on each. Remember to include money for decorations, meals, restaurants and bars if you need to. Can you afford it all? Maybe it’s time to speak to family and friends about picking a name out of a hat and buying a nice gift for one person rather than buying separate gifts for each person on the list. And, if you’re feeling pressured into buying an expensive gift for a friend that you really can’t afford, consider finding new friends.
Try and figure out what you want to buy before you enter a mall or store. When you know what you want, you’re more likely to focus on getting the item at the best price and less on being distracted by sale items that may be deeply discounted, but that you really don’t need.
Taking only cash with you on your shopping trip is another good way to avoid overspending: once the cash is gone, you’re done. Shopping online can save you in two ways: you won’t be distracted by front-of-store leaders, and you save the cost of gas, parking, your time, and the stress of endless lineups. I’m happier already.
Avoid using credit cards from major retailers and big box stores. If you end up carrying a balance it will cost you much more than a bank credit card. And that leads us to the final tip:
Never carry a balance on a credit card. Remember that estimate of $1,048 most people will spend this year? If they put that amount (you know it will be more) on an average credit card with an 18% apr, and you pay the minimum every month, you’ll still be paying for that gift 5 years from now. 5 years! Hope they really liked it.