The holidays are here, and many consumers have begun their biggest spending spree of the year. If you are worried about racking up too much debt, here are a few suggestions to help you rein in your spending:
Plan
Make a budget and a list: Decide how much you can afford to spend and stay within that budget. Make a price list of all gifts and other holiday items you plan to purchase. Even if it's not a detailed list, it will still help you avoid overspending and impulse buys.
Check it twice: Make sure your list includes not only gifts, but also all the projects and activities that make up your holiday. It's easy to overlook expenses like holiday foods, party clothes, décor and postage. Examine each item and decide if you really need it. You might discover how much you're buying just out of habit.
Comparison shop and use time wisely
Compare prices: By comparing prices at different stores, you can easily save at least 10% on most items. To save time and gas, first review prices on the stores’ websites before driving all over town.
Make time your ally: If you start your shopping sooner rather than later, that delay may force you to pay more. Shopping at the last minute may mean you won’t find the item you planned on buying and you’ll have to settle for something else that might cost more than you wanted to pay. Another benefit to starting early: It gives you more time to find the right gift and avoid impulsive decisions, which often leave you less happy with your purchase. After the holidays, begin shopping for next year's presents. That’s when retailers will slash prices to get rid of inventory. Then tuck those gifts away until next season.
Pay off debts quickly
Use a lower-interest credit card: Credit union generally offer the lowest interest rates on cards. Pay off this debt as soon as possible and don't borrow more than you can repay within 3 or 4 months. At the very least, always pay more than the minimum monthly payment. If not, you may never pay off the debt.
Start saving for next year
Set up an automatic transfer to move a specific amount of your paycheck into a savings or Holiday Club account each month. These accounts provide a practical way to save small amounts over time.
Follow these tips and you’ll be able to enjoy yourself during and after the holidays.