Holiday Spending – without Holiday Debt.
The holiday shopping season has been in full swing for several weeks, and everywhere, consumers are struggling with how to avoid impulse buys and avoid adding to their debt load. Every year you hear over and over again the how to: stay on a budget, keep a list, check the list again, and sleep on it and the advice goes on.
The question remains: how to budget your holiday spending without holiday debt?
Unfortunately, every year people caught up in the holiday spirit of the season often spend more than they intend on items to celebrate the holidays. Decorations for the home, treats, and gifts can all add up to a significant amount of money which often results in holiday debt.
Long after the snow has melted and the trees sprung back to life, many people will still be paying off the credit card debt they used to buy yet another sweater for their father and a George Foreman grill for that tough-to-buy-for uncle.
Given the uncertain economy, however, both you and your nearest and dearest might need to trim expectations before you trim the Christmas tree.
The best way to make the season’s good cheer last is to ensure that your holiday debts don’t.
Overspending at this time of year can create a cycle of indebtedness. Some people will still paying for last year’s holidays when this one rolls around.
Unfortunately, we live in a society which equate buying, spending and receiving with happiness. Don’t let the media control your true values.
If you think back to find memories of previous holidays, you’ll probably find that what made them special were the people you spent time with and the activities you shared — not the expensive gifts you received.
This year more than ever shoppers are pulling out the plastic and bringing the big bucks to cash in on holiday gifts this year. Trends show that Christmas retail sales are up five percent compared to last year. Consumer groups credit the rise in spending to the decrease in gas prices.
But retail experts warn not to get carried away. On average, Canadians expect to spend an average of $1,218 on holiday purchases, but you must plan a budget.
If you don’t want your holiday bills to last longer than the holiday season
Don’t carry your credit cards with you: if you have the credit cards with you, the temptation is so high to spend. Purchases placed on a credit card will always cost more than a purchase made in cash because of the fees and interest tacked onto the purchase amount. Many people use their credit cards during the holiday season to spend money that they do not have on purchases that they do not really need.
But if you plan ahead, you know you’re only going to use cash and how much, you are more likely to stick to the plan.
Most households spend between $500-$1,000 during the holiday season. If you add this amount to your existing credit card balance, you will be creating a steeper financial hill to climb. If you charge $1,000 on a credit card with an interest rate of 15% and just pay the minimum balance each month, it will take over 10 years to pay off Christmas 2009, and you will pay an additional $758 in interest.
Avoiding debt can be challenging during the holiday season, but by being aware of your habits and staying focused on planned purchases, you can avoid overspending on impulse and you can avoid holiday debt.
Related posts:
- Getting Your Finances in Order Before the Holidays
- How To Get Out of Debt?
- What is Debt Consolidation?
- Debt Elimination
- Financial Budgeting, Planning
- Debt Consolidation vs. Debt Elimination
- Pay Your Credit Card Balance in Full
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