According to a 2018 Magnify Money survey, the average American racked up $1,230 in debt during the holidays and 48 million were still paying that debt off the following December. Yikes!!!
If you are someone who takes on extra debt during the holiday, here are some tips to help you avoid a Holiday Debt Hangover this year.
#1) Save Up Before the Holiday Season 🎄🎅
💰 It's a little late to start this year but be sure to start saving money ahead of time for next years holiday season. It's a lot easier to save money each month leading up to the holidays than have to come up with hundreds of dollars at the end of the year.
#2) Create a Budget!
📊 How much did you spend on last years gifts, travel, food, etc.? If you struggle with overspending, try creating a budget for this holiday season. Simply, write down or use a budgeting app to figure out what this years spending is going to look like. You'll want to account for things like who you are buying for, how much you are spending on each person, and costs of travel to name a few.
With a good budget in place, you are much more likely to avoid overspending this holiday season. 😎 (Mint is a Free Budgeting App that we really like. If you're interested in trying Mint CLICK HERE)
#3) Dedicate a Day(s) to Shop and Don't Wait Until the Last Minute
🛒 Planning out days to shop and purchase everything you need for the holidays can be extremely beneficial. Don't be rushed last minute to go out and buy gifts 2 days before Christmas. Shop around, find the best deals, and Price Check...Price Check...Price Check! Black Friday is becoming a whole month of its own and Cyber Monday typically has good deals all week. Be sure to take advantage of sales and shop around for the best prices ahead of time to save some serious bucks. 🤑
#4) Get Creative with Your Gifts
🎁 If you don't have a lot of money to spend on gifts, get creative with your gift ideas. Homemade gifts can typically be made at a fraction of the cost as buying something from a store. Some great ideas are:
#5) If You do Rack Up Debt, Have a Plan to Pay it Off
💳 In the heat of Christmas shopping, it can be easy to lose track of how often you use your credit card. If you are ending the year with significant credit card debt, the first step in taking control of the situation is to figure out exactly how much you owe. From there, you'll want to create a plan to aggressively pay down your debt as soon as possible. Remember, carrying credit card debt from month to month can ruin you financially, it should be a high priority to pay off those credit card accounts.
If it comes to tax season and you still owe on holiday debt, consider using part of your tax return to pay off these accounts.
Additionally, if you are looking for an easy way to manage credit card debt, we recommend the Snowball Method:
Step 1: List your debts from smallest to largest regardless of interest rate.
Step 2: Make minimum payments on all your debts except the smallest.
Step 3: Pay as much as possible on your smallest debt.
Step 4: Repeat until each debt is paid in full.
If you found this to be useful or helpful in any way please share to help others out this holiday season.
From our Budgets & Brews team to your family,