How to avoid holiday debt this season

By Sharon Arrey, MBA Finance and Accounting

The holiday season is right around the corner, it is time for many to celebrate friends and family. With over 13.6 million Americans still dealing with debt from last holiday season, it is wise to practice real life budgeting lessons this season to avoid a repeat of last year’s chaos. Are you ready to take the necessary steps to make sure you do not end up accumulating too much debt come 2012? Let’s do this, shall we!

Plan your expenses: The wise way to start is plan your holiday expenses. How? Start by writing down all your anticipated expenses before setting a budget. Your list should include gifts, food, clothing, travels and entertainment. Keep in mind that you don’t have to buy yourself new cloths this season, get creative and reuse your wardrobe. Don’t plan to spend lavishly on gifts – keeping this in mind will decrease your chances of over spending.

Bargain shop: Earlier this year, we talked a lot about the importance of starting holiday shopping early because you tend to get cheaper gift alternatives. For example if you visited clearance items at stores like Walgreens, target et al, you would find great buys on bath and body items which would make great gifts at close to nothing. Instead of heading to the liquor store right before you attend a holiday party, have you considered going to stores like Trader Joe’s or Aldi’s where you can find wine at approximately $3 and Champaign at approximately $4? Get proactive and shop beforehand, you will save more money and time.

Pay cash: once you get in the habit of planning your expense, it becomes easy for you to make cash payments versus credit card payments. It is easy to overspend on a credit or a debit card but you can hardly overspend with cash purchases. Again the economy is not going to pick up overnight you have to start by exercising discipline and being mindful of how much you are spend.

Gift cards: These are convenient and affordable, ranging from $5 – $25 in price. This helps you also stay within budget.

Take a snack along: Don’t shop on an empty stomach, be sure to have eaten and in a relaxed mood before you hit the shops. Always carry snacks with you just in case you get hungry. Don’t indulge on eating out; you may think “it’s just a dollar” but wait a minute, it all adds up!

Sharon blogs on Last Budget

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